Computing the share price

Reference no: EM13753390

Sultan Services has 1.2 million shares outstanding. It expects earnings at the end of the year of $5.6 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 7% per year, these payout rates do not change, and Sultan's equity cost of capital is 9%, what is Sultan's share price?

A.) 22.40

B.) 56.00

C.) 93.33

D.) 140.00

Reference no: EM13753390

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