EJH Company has a market capitalization of $2.4 billion and 45 million shares outstanding. It plans...
EJH Company has a market capitalization of $2.4 billion and 45 million shares outstanding. It plans to distribute $ 105 million through an open market repurchase. Assuming perfect capital markets:
a. What will be the price per share of EJH right before the repurchase?
b. How many shares will be repurchased?
c. What will be the price per share of EJH right after the repurchase?
Homework Answers
a. 2.4 billion / 45 million = 53.33 per share
b. 105 million / 53.33 = 1,968,873 shares
c. If the markets are perfect the price per share after repurchase of shares will be the same as before repurchase i.e. 53.33 per share
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EJH Company has a market capitalization of $2.4 billion and 45
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