Tolo Co. plans the following repurchases: $10 million in one year, nothing in two years, and $20 million in three years. After that, it will stop repurchasing and will issue dividends totaling $25 million in four years. The total paid in dividends is expected to increase by 3% per year thereafter. If Tolo has 2 million shares outstanding and an equity cost of capital of 11%, what is its price per share today?

Price per share = $126.07 per shares

Explanation:

Price of all share at the end of year 3 = Dividend in year 4 / (Cost of capital - growth rate)

Price of all share at the end of year 3 = $25 million / (0.11 - 0.03)

Price of all share at the end of year 3 = $312.5 million

Year Event           Cash Inflows   P.value factor        Present value of

                                                       at 11% [1/(1-r)^n]        cash flow

1     Repurchase    $10 million             0.9009               $9,010,000

2    Repurchase    $20 million            0.7312                 $14,620,000

3    Repurchase    $312.5 million        0.7312                 $228,500,000  

Value of all shares today                                                $252,130,000

Price per share = Value of all shares today / Total shares

Price per share = $252,130,000 / 2,000,000 shares

Price per share = $126.07 per shares

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.

answer; foreign exchange transaction;