Question: Zoom Enterprises expects that one year from now it will pay total dividends of $9.5 million and repurchase $5.5 million worth of its outstanding shares.

Zoom Enterprises expects that one year from now it will pay total dividends of $9.5 million and repurchase $5.5 million worth of its outstanding shares. It plans to spend $15 million on dividends and repurchases every year in perpetuity, although it may not always be an even split between dividends and repurchases. If Zoom has an equity cost of capital of 15% and 5 million shares outstanding, what is your estimate of its share price today? (1 point)

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