Question

1. Tolo Co. is planning to buy back shares as follows. Buys of $10 million after...

1. Tolo Co. is planning to buy back shares as follows. Buys of $10 million after 1 year, not after 2 years, and $20 million after 3 years. After that, the company stopped buying treasury shares and paid $25 million in total dividends for the fourth year. The total dividend payout is expected to grow by 3% every year from then on. If Tolo has 2 million shares issued and the cost of equity capital is 11%, what is the price per share today?
2. Compco Systems last year spent 5 billion% of its share buybacks without paying dividends. Assuming that Comco's cost of equity capital is 12% and its share buybacks grow by 8% per year, estimate the market capitalization of Comco. If the number of outstanding shares is 6 billion, what is the price of that share?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
•T-Co is a successful company. You have estimated the cost of equity  to be11% and expect share...
•T-Co is a successful company. You have estimated the cost of equity  to be11% and expect share buybacks and dividends to grow 8%/year, and you believe the company could be sold for $2.4 billion at the end of Year 4 •Fill in Years 2 and 3 of the timeline below and calculate the company’s current market cap and share price given 100 million shares outstanding Timeline (in millions) Year 0 1 2 3 4 Dividends 45 BuyBacks 55 Div+Buybacks 100 Market...
Tolo Co. plans the following​ repurchases: $ 10.3 million in one​ year, nothing in two​ years,...
Tolo Co. plans the following​ repurchases: $ 10.3 million in one​ year, nothing in two​ years, and $ 19.3 million in three years. After​ that, it will stop repurchasing and will issue dividends totaling $ 25.1 million in four years. The total paid in dividends is expected to increase by 2.7 % per year thereafter. If Tolo has 1.9 million shares outstanding and an equity cost of capital of 10.6 %​, what is its price per share​ today?
Tolo Co. plans the following​ repurchases: $9.7 million in one​ year, nothing in two​ years, and...
Tolo Co. plans the following​ repurchases: $9.7 million in one​ year, nothing in two​ years, and $19.9 million in three years. After​ that, it will stop repurchasing and will issue dividends totaling $25.6 million in four years. The total paid in dividends is expected to increase by 2.9% per year thereafter. If Tolo has 1.9 million shares outstanding and an equity cost of capital of 11.4%​, what is its price per share​ today?
AFW Industries has 178 million shares outstanding and expects earnings at the end of this year...
AFW Industries has 178 million shares outstanding and expects earnings at the end of this year of $703 million. AFW plans to pay out 63% of its earnings in​ total, paying 36% as a dividend and using 27% to repurchase shares. If​ AFW's earnings are expected to grow by 8.6% per year and these payout rates remain​ constant, determine​ AFW's share price assuming an equity cost of capital of 12.5%.
1)what are the correct statements. Group of answer choice: a)If a security is underpriced, then the...
1)what are the correct statements. Group of answer choice: a)If a security is underpriced, then the expected holding period return is above the market capitalization rate. b)The value of the equity equals the present value of all future payouts (dividends plus repurchases). c)The value of a share equals the present value of all future dividends per share. d)If a firm reinvests its earnings at an ROE equal to the market capitalization rate, then its earnings-price (E/P) ratio is equal to...
Nathan Industries (NTI) has 200 million shares outstanding. In 2020, NTI's net income will amount to...
Nathan Industries (NTI) has 200 million shares outstanding. In 2020, NTI's net income will amount to $600 million. NTN has and will continue to payout 2/3 of total earnings to share holders: 31.29% as dividend and 68.71% to repurchase its shares. We also know that NTI's earnings will growth 5% a year, while its payout policy will remain unchanged over the years. If NTI's equity cost of capital is 10%, please estimate NTI's share price. $40.00 $60.00 $80.00 $39.05
Video New Productions (VNP) has 200 million shares outstanding. In 2020, VNP's net income will amount...
Video New Productions (VNP) has 200 million shares outstanding. In 2020, VNP's net income will amount to $600 million. VNP has and will continue to payout 2/3 of total earnings to share holders: 31.29% as dividend and 68.71% to repurchase its shares. We also know that VNP's earnings will growth 5% a year, while its payout policy will remain unchanged over the years. If VNP's equity cost of capital is 10%, please estimate VNP's share price. $40.00 $60.00 $80.00 $39.05
Suppose Compco Systems pays no dividends but spent $5.01 billion on share repurchases last year. If​...
Suppose Compco Systems pays no dividends but spent $5.01 billion on share repurchases last year. If​ Compco's equity cost of capital is 12.4%​, and if the amount spent on repurchases is expected to grow by 8.5% per​ year, estimate​ Compco's market capitalization. If Compco has 5.7 billion shares​ outstanding, to what stock price does this​ correspond?
Coin Flip Co. has total assets of $8 million, total short- and long-term debt of $4.8...
Coin Flip Co. has total assets of $8 million, total short- and long-term debt of $4.8 million, and $650,000 worth of 9% preferred stock outstanding. What is the firm’s total book value? What would its book value per share be if the firm had 50,000 shares of common stock outstanding? Ben’s Burgers is trading at $23 per share. There are 390 million shares outstanding. What is the market capitalization of this company? The MedTech Company recently reported net profits after...
This is a successful tech company. You have estimated the C of E to be 11%...
This is a successful tech company. You have estimated the C of E to be 11% and expect share buybacks and dividends to grow 8%/year, and you believe the company could be sold for $2.4 billion at the end of Year 4 Fill in Years 2 and 3 of the timeline below and calculate the company’s current market cap and share price given 100 million shares outstanding Timeline ($ in Millions)             Year                0          1          2          3          4             Dividends                   ...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT