Shatin Intl. has 10.1 million shares, an equity cost of capital of 13% and is expected to pay a total dividend of $19.9 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $10.2 million of stock each year as well. What is your estimate of Shatin's stock price after this announcement? The stock price will be $ (Round to the nearest cent.)

Shatin Intl. has 10.1 million shares, an equity cost of capital of 13% and is expected to pay a total dividend of $19.9 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $10.2 million of stock each year as well. What is your estimate of Shatin's stock price after this announcement? The stock price will be $ (Round to the nearest cent.)

Name: Shatin Intl. has 10.1 million shares, an equity cost of capital of 13
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Description: Shatin Intl. has 10.1 million shares, an equity cost of capital of 13% and is expected to pay a total dividend of $19.9million each year forever. It announces that it will increase its payout to shareholders. Instead of increasingits dividend, it wi

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 23P

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