Suppose Compco Systems pays no dividends but spent $5 billion on share repurchases last year. If Compcos

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Suppose Compco Systems pays no dividends but spent $5 billion on share repurchases last year. If Compco’s equity cost of capital is 12%, and if the amount spent on repurchases is expected to grow by 8% per year, estimate Compco’s market capitalization. If Compco has 6 billion shares outstanding, to what stock price does this correspond?

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Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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