- Aaron Inc. has 314 million shares outstanding. It expects earnings at the end of the...

 

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- Aaron Inc. has 314 million shares outstanding. It expects earnings at the end of the year to be $602 million. The firm's equity cost of capital is 12%. Aaron pays out 50% of its earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 7% per year, what is Aaron's share price? - Aaron Inc. has 314 million shares outstanding. It expects earnings at the end of the year to be $602 million. The firm's equity cost of capital is 12%. Aaron pays out 50% of its earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 7% per year, what is Aaron's share price?

Answer rating: 100% (QA)

To calculate Aaron Incs share price we can use the dividend discount model DDM since the company pay... View the full answer