Question

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?

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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)
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?
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)                                                                                                                   
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
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?
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?
Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share,...
Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,000 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,000 worth of stock. Ignore taxes. Assets Liabilities and Equity Cash $2,000 Debt $10,000 Fixed assets 28,000 Equity 20,000 What will be the price per share under each alternative (dividend versus repurchase)? (4 Marks) If total earnings of the firm are $2,000 a year, find earnings...
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
XYZ Corp. currently has $37 million in excess cash that it plans on returning to its...
XYZ Corp. currently has $37 million in excess cash that it plans on returning to its shareholders through a share repurchase. XYZ's current share price is $16.9 and it currently has 25.6 million shares outstanding. In addition, the market value of the company's debt is $14 million. Assuming perfect markets, what will XYZ's share price be after it uses the excess cash to repurchase shares? Round your answer to two decimals (don't include the $-symbol in your answer).
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT