Question

The balance sheet for Sinking Ship Corp. is shown here in market value terms. There are 5,000 shares of stock outstanding. Cash Market Value Balance Sheet $44,300 Equity 370,000 414,300 Fixed assets Total $ 414,300 Total $414,300 Instead of a dividend of $2.00 per share, the company has announced a share repurchase of $10,000 worth of stock. a. How many shares will be outstanding after the repurchase? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g. 32.16.) b. What will the price per share be after the repurchase? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Shares outstanding New stock price 82.86 < Prex4 of 9 Next >

Answer 1

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e 9 v 00:52 u * ENG 17-02-202024 - fix cX104 cu X cv cw cx cr cz DA DB DC DD DE DF - CURRENT PRICE = 414300/5000 = 82.86 REPURCHASE AMOUNT = NO OF SHARES REPURCHASED = NO OF SHARES LEFT AFTER REPURCHASE = 10000 120.69 [10000/82.86] 4879.31 (5000 - 120.69] VALUE OF SHARES AFTER REPURCHASE = PRICE PER SHARE AFTER REPURCHASE = 404300 [414300 - 10000] 82.86 (404300/4879.31] THE TRANSACTION WILL REDUCE SHAREHOLDERS' EQUITY BY 10000 ANSWERS NEW SHARES OUTSTANDING b SHARE PRICE 4879.31 82.86 105 106 107 HIGH LOW TARGET PRICE STOCK DIV NAV HEDGE FUND MF EV PE EPS DIV ABNORMAL deberk MARGIN MONEY marginal tax PB ROPI APV R... :