AFW Industries has 201 million shares outstanding and expects earnings at the end of this year of $673 million. AFW plans to pay out 61% of its earnings in total, paying 34% as a dividend and using 27% to repurchase shares. If AFW's earnings are expected to grow by 8.9% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 12.1%.

AFW Industries has 201 million shares outstanding and expects earnings at the end of this year of $673 million. AFW plans to pay out 61% of its earnings in total, paying 34% as a dividend and using 27% to repurchase shares. If AFW's earnings are expected to grow by 8.9% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 12.1%.

Name: Is my answer correct? I feel as if I am missing a few steps.AFW Indus
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Description: Is my answer correct? I feel as if I am missing a few steps.AFW Industries has 201 million shares outstanding and expects earnings at the end of this year of $673 million. AFW plans to pay out 61% of its earnings in total, paying 34% as a dividend

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 22P

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