Greg wants your advice on a potential stock purchase. There is excess capital on the balance sheet – and he wants to put

[answerhappygod]

Greg wants your advice on a potential stock purchase. There is
excess capital on the balance sheet – and he wants to put it to
good use. He is excited because he heard that Alt Tech’s stock is
trading at $75. He notes that Alt Tech. just paid out $1.7308M in
dividends and repurchased $4.3983M worth of shares. Alt Tech. has
1.12M shares outstanding. Total payouts are expected to grow at an
annual rate of 5%. Greg – like the other investors of Nate
Industries – expects a 12% rate of return on shares.
a) What should Greg do? You recall from your finance class that
you should use the Total Payout model to estimate of the stock
price today. You can assume that all payouts occur annually and
that the next payout will be in exactly one year. Show your work
and clearly state your final answer.
(b) Greg thanks you for your advice. But, thinking about it some
more, he asks you if he should buy or not buy the stock if the
stock were currently trading at $100 instead of $75. What do you
advise him?
(c) Greg wonders how things might be different if the payouts
mentioned above did not grow by 5% - but instead were flat. Should
the stock be purchased? Assume that the price is still $75.
Someone mentioned that you need NET INCOME to complete this
question, I have been told you do not or you can get it from the
values posted in the question.