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Alton Industries plans to distribute cash to its shareholders at the end of this year (12 months from now) by paying a per share on share repurchases. The CFO anticipates that the firm’s earnings will grow by annually indefinitely. Assuming that ALTON’s equity cost of capital remains at and the payout policy stays the same, what is the company’s current stock price? Write your answer to two decimal places.
ABAM Company specializes in manufacturing coffee machines for export and has been listed on your country’s stock exchange for several years. Currently, its stock is trading at per share. Recently, the company paid a dividend of per share, which is expected to grow steadily at a rate of per year in perpetuity. Based on this information, what is ABAM Company’s cost of equity capital? Write your answer to two decimal places.