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NORDAM Group, a firm that specializes in the design and manufacturing of aircraft components, has...

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Question

Finance

NORDAM Group, a firm that specializes in the design and manufacturing of aircraft components, has

170

million shares outstanding and analysts expect NORDAM to have earnings of

$410

million this coming year (t=1). NORDAM plans to pay out

53%

of its earnings in dividends and they expect to use another

14%

of their earnings to repurchase shares. NORDAMs equity cost of capital is

13%.

Its earnings are expected to grow at a rate of 3% per year and these payout rates are expected to remain constant. What is the value of one share of NORDAM stock today?

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