Shatin Intl. has 9.7 million shares, an equity cost of capital of 13.3% and is expected to pay a total dividend of $20.7 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 $153.38. (Round to the nearest cent.)

Shatin Intl. has 9.7 million shares, an equity cost of capital of 13.3% and is expected to pay a total dividend of $20.7 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 $153.38. (Round to the nearest cent.)

Name: Shatin Intl. has 9.7 million shares, an equity cost of capital of 13.
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Description: Shatin Intl. has 9.7 million shares, an equity cost of capital of 13.3% and is expected to pay a total dividend of $20.7 million each year forever. It announces that it will increase its payout toshareholders. Instead of increasing its dividend, it

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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