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A firm with 100 million shares outstanding repurchased 10 million shares at the market price of...

A firm with 100 million shares outstanding repurchased 10 million shares at the market price of $20 per share. What is the total market value of the equity after the repurchase? What is the per-share value after the repurchase?


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Answer #1

Market value before repurchase = No of shares outstanding * Market price

= 100 Million shares * $20

= $ 2000 million

Market value after repurchase = MV Before repurchase - Value of share repurchased

= 2000 million - 10 million shares * $20

= 2000 - 200

= $ 1800 million

Shares outstanding after repurchase = share before repurchase - Share repurchased

= 100 million - 10 million

= 90 million shares

Price per share = MV after repurchase / Share outstanding after repurchase

= 1800 / 90

= $20

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