Multiple Choice
Aaron Inc.has 316 million shares outstanding.It expects earnings at the end of the year to be $602 million.The firm's equity cost of capital is 11.5%.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 6% per year,what is Aaron's share price?
A) $8.66
B) $17.32
C) $25.98
D) $34.64
E) $12.43
Correct Answer:
Verified
Correct Answer:
Verified
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