Answer:
Valence's share price is $152.47
Step-by-step explanation:
Given:
Payout percent = 40% or 0.4 (includes 15% dividends and 25% repurchases)
Total earnings = $850,000,000
Cost of capital = 8%
Dividend growth rate = 7%
Total payout = 0.4 × 850,000,000 = $340,000,000
We need to compute present value of total payout (dividends and repurchases) which is computed as shown below:
Present value of payout =

Present value of payout =

= $34,000,000,000
Now compute price of share:
Price of share =

=

= $152.47