Shatin Intl. has 10 million shares, an equity cost of capital of 13% and is expected to

Question:

Shatin Intl. has 10 million shares, an equity of 13% and is expected to pay a total of $20 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its it will keep it constant and will start repurchasing $10 million of stock each year as well. How much will its stock price increase?
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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...