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A firm has 10 million shares outstanding with a market price of $35 per share. The...

A firm has 10 million shares outstanding with a market price of $35 per share. The firm has $35 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase? Enter your answer in millions. For example, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Round your answer to two decimal places.

$   million

How many shares will remain after the repurchase? Round your answer to the nearest whole number.

shares

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Answer #1

Value of operations are repurchase = 10 million*35 - 35 million

=$315 million

Shares after repurchase = 10 million - 35 million/35

=9 million shares

I.e. 9,000,000 shares

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