Question: Suppose Amazon pays no dividends but spent $5 billion on share repurchases last year. If Amazons equity cost of capital is 12%, and if the

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

**please list out step by step actions, please show the formulas used, please DONT USE excel**

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Problem 13-54 (LO 13-1) (Algo) [The following information applies to the questions displayed below.] Javier recently graduated and started his career with DNL Incorporated DNL provides a defined...

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...

Suppose Amazon.com Inc. pays no dividends but spent $1.88 billion on share repurchases last year. If Amazons equity cost of capital is 8.1 %, and if the amount spent on repurchases is expected to...

Suppose Cisco Systems pays no dividends but spent $5 billion on share repurchases last year. If Ciscos equity cost of capital is 12%, and if the amount spent on repurchases is expected to grow by 8%...

15. Suppose Cisco Systems pays no dividends but spent $5 billion on share repurchases last year. Il Ciscos equity cost of capital is 12%, and if the amount spent on repurchases is expected to grow by...

Suppose Compco Systems pays no dividends but spent $5.09 billion on share repurchases last year. If Compcos equity cost of capital is 11.4%, and if the amount spent on repurchases is expected to grow...

how to calculate the market capitalization and what is the stock price. 9-15. Suppose Cisco Systems pays no dividends hut spent $5 billion on share repurchases last year. If Cisco's equity cost of...

Suppose Amazon pays no dividends but spent $5 billion on share repurchases last year. If Amazons equity cost of capital is 12%, and if the amount spent on repurchases is expected to grow by 8% per...

K Suppose Compco Systems pays no dividends but spent $4.88 billion on share repurchases last year. If Compco's equity cost of capital is 12.3%, and if the amount spent on repurchases is expected to...

Suppose comp systems pays no dividends but spent 5 . 1 1 billion on share re - purchases last year if compos equity cost of capital is 1 1 . 8 % and if the amount spent on purchases is expected to...

A random sample of new members of a large downtown fitness club was selected, and tracked over six months. Of the 60 members who joined the club to participate in fitness classes, 38 were still...

24). Define what is mean by a tick mark. What is its purpose?

An experiment was conducted to determine whether additives increase the adhesiveness of rubber products. Sixteen products were made with the new additive and another 16 without the new additive. The...

last two options for the multiple choice are : performance management development A construction equipment manufacturer, Roswell Corporation, is focusing on becoming a leader in sustainability in...

What are three ways that visual aids complement your business reports? (Objective 1)

Construct a graph that shows Student Housing at Be Smart University for 2007. This graph is for an oral presentation and will not need a figure number but will need a title. Follow traditional style...

Technology.Teamwork. Individually or as a group, develop a proposal on one of the following topics. The proposal is to be sent to the appropriate administrator at your college. (Objectives 1 and 3)...