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)$70.05
• C)$56.60
• D)$10.51

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Definitions:

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, emphasizing the importance of the individual psyche and the personal quest for wholeness.

Alfred Adler

An Austrian medical doctor, psychotherapist, and founder of the school of individual psychology who introduced concepts such as the inferiority complex and stressed the importance of feelings of inferiority.

Collective Unconscious

A concept proposed by Carl Jung referring to the part of the unconscious mind which is derived from ancestral memory and experience and is common to all humankind.

Personal Unconscious

defined by Carl Jung, is a layer of the unconscious mind distinct from the collective unconscious, containing forgotten information and personal experiences.