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anygoal [31]
3 years ago
8

Suppose Compco Systems pays no dividends but spent $ 4.92 billion on share repurchases last year. If​ Compco's equity cost of ca

pital is 12.6 %​, and if the amount spent on repurchases is expected to grow by 8.9 % per​ year, estimate​ Compco's market capitalization. If Compco has 6.3 billion shares​ outstanding, to what stock price does this​ correspond?
Business
1 answer:
RUDIKE [14]3 years ago
4 0

Answer:

$144.81 bil or $22.99 per share

Explanation:

We can apply discounted dividend model (DDM) to value the stock in this example because share repurchase is equivalent to cash dividend, which are both cash paid out to shareholders of the company.

DDM is stated as below:

V_o = [D_o x (1 + g)]/(r - g), where:

V_o: Intrinsic value of the company

D_o: Current dividend or Share repurchased in cash;

g: Dividend growth;

r: cost of equity.

Putting all the number together, we have:

V_o = [4.92 x (1 + 8.9%)]/(12.6% - 8.9%) = 144.81 bil or 144.81/6.3 = 22.99 per share

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LiRa [457]

Answer:

Utility overvalued

Explanation:

According to economists, such people over value the utility they are meant to get in the future. They only want to get the entire satisfaction at a go because of the fear of not getting that food again in the nearest future.

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3 years ago
After an unsuccessful attempt to train her puppy one morning, Sharon, the office manager, scolds her assistant when she arrives
Assoli18 [71]
Displacement is the defense mechanism. Devised by the Freud's daughter Anna Frued which is one delicate follower of the Psychoanalysis theory and therapy pionnered by Sigmund himself. Defense mechanisms are told to be formed when there is a presence of anxiety, these anxieties are shaped when the id, ego and superego contradicts and coerces with one another. Thus defense mechanisms are formed to help the indivdual cope with his/her situation and anxiety. One is displacement as displayed in the statement above.
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2 years ago
What actions would the fomc likely take if it were to pursue contractionary monetary policy using open market operations?.
tamaranim1 [39]

The key movements via are to increase the economy consist of a decreased bargain fee, buying government securities, and a decreased reserve ratio.

<h3>When the Fed makes use of contractionary policy?</h3>

When GDP in a kingdom is growing too fast, inflicting inflation to grow past a suited charge of two%, central banks will put in force a contractionary economic coverage. The Federal Reserve, or any principal financial institution, has three primary pieces of equipment to reduce the money supply.

A direct advantage of contractionary economic coverage is that it strengthens government budgets. As an instance, whilst the Fed's bargain price increases, the government earns extra cash from the banks that borrow budget from the Fed's cut price window. The government can use this supply of sales to offset spending and decrease price range deficits.

Learn more about contractionary monetary policy here brainly.com/question/27500362

#SPJ10

3 0
1 year ago
A personal business letter is written by an individual to a company for resolving issues related to an unexpected error on a bil
yarga [219]

Answer:

See the explanation below.

Explanation:

                                                                        62, Charlton Street,

                                                                        Ibadan, Oyo State,

                                                                        Nigeria.

                                                                        14 May 2020.

The Accounting Officer,

XYZ Company,

Ibadan, Oyo State,

Nigeria.

Dear Sir,

Complaint Lodgment Over an Unexpected Error in My Bill

This is to bring to your notice an unexpected error of $9 over charge in the consumable items I purchased from your store yesterday, 13 May 2020.

From my recalculation of the total amount for the purchased item, I could observed that the error was due to a transposition of figure by your cashier; he charged me a total sum of $76 instead of $67.

Copies of the invoice and the payment receipt for the items are hereby attached to this letter for your verification. After your verification, kindly get back to me so that I can come to your office for the refund.

I look forward to receiving your usual timely response.

Yours sincerely,

Amcool.

4 0
3 years ago
What is the value of x in the equation 1/3 X - 2/3 = -18?
Deffense [45]

The value of x is -52.

6 0
3 years ago
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