Suppose Amazon com Inc pays no dividends but spent $2 billion on share repurchases last year If Amazons equity cost of capital is 8 , and if the amount spent on repurchases is expected to grow by 6 per year, estimate Amazons market capitalization If Amazon has 450 million shares outstanding, what s...

There is no major difference in share repurchase and dividends Just ...

Suppose Amazon.com Inc. pays no dividends but spent $2 billion on share repurchases last year. If Amazons

Question:

Suppose Amazon.com Inc. pays no dividends but spent $2 billion on share repurchases last year. If Amazon’s equity is 8%, and if the amount spent on repurchases is expected to grow by 6% per year, estimate Amazon’s market capitalization. If Amazon has 450 million shares outstanding, what stock price does this correspond to?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...