Sultan Services has 1.4 million shares outstanding. It expects earnings at the end of the year of $5.20 million. Sultan pays out 60% of its earnings in total -40% paid out as dividends and 20% used to repurchase shares. If Sultan's earnings are expected to grow by 5% per year, these payout rates do not change, and Sultan's equity cost of capital is 11%, what is Sultan's share price? OA. $14.86 OB. $22.28 OC. $37.14 OD. $7.43

Sultan Services has 1.4 million shares outstanding. It expects earnings at the end of the year of $5.20 million. Sultan pays out 60% of its earnings in total -40% paid out as dividends and 20% used to repurchase shares. If Sultan's earnings are expected to grow by 5% per year, these payout rates do not change, and Sultan's equity cost of capital is 11%, what is Sultan's share price? OA. $14.86 OB. $22.28 OC. $37.14 OD. $7.43

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 5P

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