Valence Electronics Has 217 Million Shares on Issue

question 24

Multiple Choice

Valence Electronics has 217 million shares on issue. It expects earnings at the end of the year of $760 million. Valence pays out 40% of its earnings in total - 15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are expected to grow by 6% per year, these payout rates do not change, and Valence's equity cost of capital is 8%, what is Valence's share price?

• A) $24.40
• B) $56.60
• C) $70.05
• D) $10.51

---

Definitions:

Diagnostic X-ray

A medical imaging technique using X-rays to diagnose or monitor various conditions by creating images of structures inside the body.

Low-birth-weight

Describes babies born with a weight of less than 2,500 grams (5 pounds, 8 ounces), often associated with developmental and health challenges.

Enlarged Craniums

A condition characterized by the abnormal growth of the head or skull, often indicative of medical or genetic issues.

Fetal Alcohol Syndrome

A condition in a child resulting from alcohol exposure during the mother's pregnancy, causing growth problems, facial anomalies, and neurological issues.