Chittenden Enterprises Has 632 Million Shares Outstanding

question 52

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
• E)$16.42

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Definitions:

Bartering of Goods

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Claim Scrubber Program

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Group Insurance

An insurance plan that provides coverage to a group of members, usually employees of a company, under a single policy.