Shatin Intl. has
10
million shares, an equity cost of capital
12%,
and is expected to pay a total dividend of
$25
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
million of stock each year as well. How much will its stock price increase?
Question content area bottom
Part 1
The stock price will increase by
$enter your response here.
(Round to the nearest cent.).
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Shatin Intl has 10 million shares an equity cost of capita.pdf
1. Shatin Intl. has
10
million shares, an equity cost of capital
12%,
and is expected to pay a total dividend of
$25
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
million of stock each year as well. How much will its stock price increase?
Question content area bottom
Part 1
The stock price will increase by
$enter your response here.
(Round to the nearest cent.)
