Sultan Services Has 1

question 51

Multiple Choice

Sultan Services has 1.2 million shares outstanding. It expects earnings at the end of the year of $6.0 million. Sultan pays out 60% of its earnings in total: 40% paid out as dividends and 20% used to repurchase shares. If Sultan's earnings are expected to grow by 5% per year, these payout rates do not change, and Sultan's equity cost of capital is 10%, what is Sultan's share price?

• A) $12.00
• B) $24.00
• C) $36.00
• D) $60.00

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Definitions:

Net Exports

The value of a country's exports minus the value of its imports, a key component in calculating a nation's GDP.

Government Budget Deficit

A financial situation where a government's expenditures exceed its revenues over a specified period, leading to borrowing or debt accumulation.

Public Saving

is the difference between the taxation revenue that the government receives and its spending.

National Saving

The total amount of savings generated within a country, including both private and public savings, which is key to funding investment.