Suppose Compco Systems pays no dividends but spent $5.09 billion on share repurchases last year. If Compcos
Question:
Suppose Compco Systems pays no dividends but spent $5.09 billion on share repurchases last year. If Compco’s equity cost of capital is 11.4%, and if the amount spent on repurchases is expected to grow by 7.7% per year, estimate Compco’s market capitalization.
If Compco has 5.9 billion shares outstanding, to what stock price does this correspond?
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Step by Step Answer:
To estimate Compco Systems market capitalization we can use the concept of the Gordon Growth Model w...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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