Question

A firm has 6,680 common shares outstanding with a total market value of $315,070. Currently, the...

A firm has 6,680 common shares outstanding with a total market value of $315,070. Currently, the firm has excess cash of $14,365 and net income of $26,025. If the firm uses all of its excess cash to repurchase the common shares, what will be the revised EPS after the stock repurchase is complete?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Current Market price per share = $315070/6680
                     = $47.17 per share.
Number of shares that can be repurchased = $14365/$47.17
                                              = 304 shares
Remaining shares after repurchase = 6680- 304 = 6376
EPS after repurchase is complete = $26025/6376 shares
                          = $4.08 per share
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A firm has 5,490 common shares outstanding with a total market value of $249,620. Currently, the...
A firm has 5,490 common shares outstanding with a total market value of $249,620. Currently, the firm has excess cash of $12,370 and net income of $19,970. If the firm uses all of its excess cash to repurchase the common shares, what will be the revised EPS after the stock repurchase is complete?
A firm has a market value equal to its book value. Currently, the firm has excess...
A firm has a market value equal to its book value. Currently, the firm has excess cash of $700 and other assets of $6,300. Equity is worth $7,000. The firm has 600 shares of stock outstanding and net income of $1,512. What will the new earnings per share be if the firm uses 25 percent of its excess cash to complete a stock repurchase?
Allison's has a market value equal to its book value. Currently, the firm has excess cash...
Allison's has a market value equal to its book value. Currently, the firm has excess cash of $1,100 and other assets of $12,400. Equity is worth $13,500. The firm has 2,700 shares of stock outstanding and net income of $10,800. The firm uses its excess cash to complete a stock repurchase. What will be the change in price-to-earnings ratio?
A firm has a market value equal to its book value. Currently, the firm has excess...
A firm has a market value equal to its book value. Currently, the firm has excess cash of $500 and other assets of $7,000. Equity is worth $7,500. The firm has 750 shares of stock outstanding and net income of $810. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase? a) $.63 b) $.71 c) $1.08 d) $1.16 e) $1.79
Question 2 Google Books Incorporated has a market value equal to its book value. Currently, the...
Question 2 Google Books Incorporated has a market value equal to its book value. Currently, the firm has excess cash of $150,000 other assets of $ 345,000 and equity valued at $ 415,000. The firm has 5,000 shares of stock outstanding and net income of $85,000. What will the new earnings per share be if the firm uses 45 percent of its excess cash to complete a stock repurchase? (Show all workings)                                                                                                                   
Eisley's Inc has a market value of equity of $9,900. The firm has 600 shares of...
Eisley's Inc has a market value of equity of $9,900. The firm has 600 shares of stock outstanding and excess cash of $528. Assume the firm uses all of its excess cash for a stock repurchase. Which of the following would M&M say is the price per share be after the repurchase? Group of answer choices $17.80 $18.00 $16.50 $17.67 $15.90
Firm BUS106 now has 100,000 shares of common stock outstanding, and the total market value of...
Firm BUS106 now has 100,000 shares of common stock outstanding, and the total market value of equity equals $5,000,000. It also has an equal amount of debt. Firm BUS106 is expected to generate $1,500,000 in EBIT with a $250,000 of interest expense. Assume tax rate is 0, what will happen to earning per share (EPS) if firm BUS106 buys back $2,500,000 of shares, and the firm substitutes an equal amount of additional debt?        EPS decreases by 6.7% to...
Financial Alchemists (FA) has a market value equal to its book value. Currently, FA has cash...
Financial Alchemists (FA) has a market value equal to its book value. Currently, FA has cash on hand of $2400 and other assets of $8,500. Equity is worth $6,000. FA has 200 shares of stock outstanding and net income of $1200. How much greater will earnings per share be if FA uses its cash to repurchase some of its own stock? $10.00 $6.00 EPS won't increase, it will decline $4.00 $0.00
Tomas has the same market value as its book value, they are the same. The company...
Tomas has the same market value as its book value, they are the same. The company has excess cash of $1,100, equity of $13,500 and other assets of $12,400. The company has 2,700 shares of stock outstanding and net income of $10,800. The company then uses its excess cash of $1,100 to do a stock repurchase. After this stock repurchase, how much will the price-to-earnings ratio change? (Show before and after P/E)
PQR Co has 80,000 shares of stock outstanding with a market price of $5 per share....
PQR Co has 80,000 shares of stock outstanding with a market price of $5 per share. Total earnings for the current year is $127,800. The firm has cash of $45,000 in excess of what is necessary to fund its positive NPV projects. The firm has other assets worth $475,000 (market value). What will be the firm's earnings per share after the repurchase if the firm uses the $45,000 excess cash to buy back stock at $5 per share ? a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT