What is the share price today

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Libeccio Inc. pays all the free cashflow (to equityholders) via share buyback for the next two years. In year 3 the company will pay half of the free cashflow via dividend payment and, after that pay out the residual via buy back.

The free cashflow of the last year (just paid out) was 12,000,000 USD and there are 4,000,000 shares outstanding today. The free cashflow is expected to increase perpetually at a 3% rate and the expected return on levered equity is 14.35%.

a) What is the share price today?

b) What is the dividend per share paid out in year 3?

c) How many shares are left outstanding at year 3, after the entire annual free cashflow to equity holders is paid out?

Reference no: EM133111104

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