Chittenden Enterprises Has 632 Million Shares Outstanding

question 58

Multiple Choice

Chittenden Enterprises has 632 million shares outstanding.It expects earnings at the end of the year to be $940 million.The firm's equity cost of capital is 10%.Chittenden pays out 30% of its earnings in total: 20% paid out as dividends and 10% used to repurchase shares.If Chittenden's earnings are expected to grow at a constant 4% per year,what is Chittenden's share price?

• A)$4.96
• B)$3.36
• C)$7.44
• D)$14.88

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Definitions:

Portfolio Analysis

A tool or method used by investors and organizations to assess the potential or performance of a set of investments or business units.

Growth-Market Share Matrix

A strategic tool used by companies to evaluate their product portfolios and decide on actions like investment, divestiture, or growth strategies, based on market growth rates and relative market share.

Product Platform

A set of common designs, components, and technologies that are used as a base to produce a range of products within a portfolio.

Brand Extension

Refers to a strategy where a company uses an existing brand name to launch a product in a different category.