Use the Following Information to Answer the Question(s)below

question 30

Multiple Choice

Use the following information to answer the question(s) below.
Taggart Transcontinental pays no dividends,but spent $4 billion on share repurchases last year.Taggart's equity cost of capital is 13% and the amount spent on repurchases is expected to grow by 5% per year.Taggart currently has 2 billion shares outstanding.
-Taggart's stock price is closest to:

• A)$12.50.
• B)$15.40.
• C)$20.00.
• D)$25.00.

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Definitions:

Normal Distribution

A bell-shaped distribution characterized by its mean and standard deviation, showing how data points are dispersed or spread out.

Chi-squared Probability Distribution

A distribution that represents the distribution of the sum of the squares of variables that are independent and normally distributed.

Normal Distribution

Another term for Gaussian distribution; a probability distribution that is symmetric around the mean, indicating that data close to the mean are more frequent than data far from the mean.

Variance

A measure of how much values in a dataset differ from the mean or average of the set, indicating the spread of the data.