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Problem regarding the market capitalization

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Reference no: EM13983371

Suppose Amazon.com Inc. pays no dividends but spent $2 billion on share repurchases last year.

If Amazon's equity cost of capital is 8%, and if the amount spent on repurchases is expected to grow by 6% per year, estimate Amazon's market capitalization. If Amazon has 450 million shares outstanding, what stock price does this correspond to?

Reference no: EM13983371

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