Valence Electronics has 229 million shares outstanding. It expects earnings at the end of the year of $770 million. Valence pays out 40% of its earnings in total - 15% paid out as dividends and 25% used to repurchase shares If Valence's earnings are expected to grow by 7% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? OA. $53.80 OB. $10.09 OC. $67.25 OD. $20 18 m

Valence Electronics has 229 million shares outstanding. It expects earnings at the end of the year of $770 million. Valence pays out 40% of its earnings in total - 15% paid out as dividends and 25% used to repurchase shares If Valence's earnings are expected to grow by 7% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? OA. $53.80 OB. $10.09 OC. $67.25 OD. $20 18 m

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Suppose Compco Systems pays no dividends but spent $5.15 billion on share repurchases last year. If Compco's equity cost of capital is 12.3%, and if the amount spent on repurchases is expected to grow by 8.9% per year, estimate Compco's market capitalization. If Compco has 5.9 billion shares outstanding, to what stock price does this correspond?
Zoom Enterprises expects that one year from now it will pay a total dividend of $4.5 million and repurchase $4.5 million worth of shares. It plans to spend $9.0 million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is 13.5% and it has 4.9 million shares outstanding, what is its share price today?
company presently pays no dividend. You anticipate company will pay an annual dividend of $1.00 per share two years from today and you expect dividends to grow by 3% per year thereafter. If company’s equity cost of capital is 14%, then what is a fair value for a share of company today? Enter answer rounded to the nearest cent.
Anle Corporation has a current price of $13, is expected to pay a dividend of $2 in one year, and its expected price right after paying that dividend is $22. What is Anle's expected dividend yield? (Round to two decimalplaces.) What is Anle's expected capital gain rate? (Round to two decimalplaces.) What is Anle's equity cost of capital? (Round to two decimalplaces.)
Zoom Enterprises expects that one year from now it will pay a total dividend of $4.9 million and repurchase $4.9 million worth of shares It plans to spend $9.8 million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases If Zoom's equity cost of capital is 12 5% and it has 5 4 million shares outstanding, what is its share price today? The price per share is $ (Round to the nearest cent)
Cullumber Wok Co. is expected to pay a dividend of $1.70 one year from today on its common shares. That dividend is expected to increase by 5.00 percent every year thereafter. If the price of Cullumber common stock is $17.00, what is the cost of its common equity capital? - Cost of common equity =?%
XYZ Shoes Inc pays dividends annually and has an active share repurchase program. XYZ makes all of its payouts at the end of each year and its year-end was yesterday. Today, XYZ's share price is P34.33 and there are 100 million shares outstanding. Shareholders require a return of 9% and analysts expect XYZ's payouts to grow in perpetuity at an annual rate of 3%. What are next year's total payouts?
Time Warner shares have a market capitalization of $55 billion. The company just paid a dividend of $0.35 per share and each share trades for $35. The growth rate in dividends is expected to be 6.5% per year. Also, Time Warner has $20 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 30%, compute the WACC?
Summit Systems will pay an annual dividend of $1.56 this year. If you expect Summit's dividend to grow by 5.8% per year, what is its price per share if the firm's equity cost of capital is 10.9%? The price per share is $ (Round to the nearest cent.) M
NHL Inc.’s current return on equity (ROE) is 20%, its current book equity per share is $50, and it pays out half of its earnings as dividends. Both the ROE and payout ratio will stay constant for the next two years. After year 2, competition will force ROE down to 8%, and NHL will increase its payout ratio to 75%. The cost of capital is 10%. What is NHL’s stock price today?
NoGrowth Corporation currently pays a dividend of $1.72 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 12% per year?
Summit Systems will pay an annual dividend of $1.53 this year. If you expect Summit's dividend to grow by 5.9% per year, what is its price per share if the firm's equity cost of capital is 10.2% ? The price per share is $ (Round to the nearest cent.)

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