Suppose Amazon.com Inc. pays no dividends but spent $1.88 billion on share repurchases last year. If Amazons

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Suppose Amazon.com Inc. pays no dividends but spent $1.88 billion on share repurchases last year. If Amazon’s equity cost of capital is 8.1 %, and if the amount spent on repurchases is expected to grow by 6.4% per year, estimate Amazon’s market capitalization. If Amazon has 432 million shares outstanding, what stock price does this correspond to?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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