Suppose Compco Systems pays no dividends but spent $5.16 billion on share repurchases last year. If Compco's equity cost of capital is 12.7%, and if the amount spent on repurchases is expected to grow by 8.2% per year, estimate Compco's market capitalization. If Compco has 5.7 billion shares outstanding, to what stock price does this correspond? Compco's market capitalization will be $ billion. (Round to two decimal places.)

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
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Suppose Compco Systems pays no dividends but spent $5.16 billion on share repurchases last year. If Compco's
equity cost of capital is 12.7%, and if the amount spent on repurchases is expected to grow by 8.2% per year,
estimate Compco's market capitalization. If Compco has 5.7 billion shares outstanding, to what stock price does
this correspond?
Compco's market capitalization will be $ billion. (Round to two decimal places.)
Transcribed Image Text:Suppose Compco Systems pays no dividends but spent $5.16 billion on share repurchases last year. If Compco's equity cost of capital is 12.7%, and if the amount spent on repurchases is expected to grow by 8.2% per year, estimate Compco's market capitalization. If Compco has 5.7 billion shares outstanding, to what stock price does this correspond? Compco's market capitalization will be $ billion. (Round to two decimal places.)
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