. Why might a company repurchase its own stock?
A) It feels that the market undervalues its shares
B) To offset dilutive effects of employee stock options
C) To increase the number of shares outstanding
D) A and B
The answer is option D - A and B
A) It feels that the market undervalues its shares
B) To offset dilutive effects of employee stock options
. Why might a company repurchase its own stock? A) It feels that the market...
identify three reasons why a firm might repurchase its own stock
1. Stock repurchases The stock that has been bought back and is not considered outstanding anymore is called There are a number of reasons why a firm might want to repurchase its own stock. Read the statement and then answer the corresponding question about the company's motivation for the stock repurchase: Smith and Martin Co.'s board of directors has decided to repurchase some of its stock on the open market because it wants to increase the company's debt-to-equity ratio. What...
Stock repurchase The following financial data on the Bond Recording Company are available: EE repurchase stock at $32 per share. The firm is currently considering whether it should use $450,000 of its earnings to help pay cash dividends of $1.80 per share or to b. Calculate the EPS after the repurchase. c. If the stock still sells at 15 times eamings, what will the market price be after the repurchase? d. Compare the pre- and post-repurchase eamings per share e....
Analyzing and Computing Average Issue Price and Treasury Stock Cost Assume this is the stockholders' equity section from the Campbell Soup Company balance sheet. Assume Campbell Soup Company also reports the following statement of stockholders' equity. (a) Campbell Soup Company reports $20 million in its Common Stock account. Which of the following statements best describes the manner in which this number is computed? The computation uses the number of outstanding shares multiplied by the market price of the stock. The computation uses the number of...
(Repurchase of stock) The Dunn Corporation is planning to pay dividends of $460000. There are 230000 shares outstanding, and earnings per share are $6. The stock should sell for $48 after the ex-dividend date. If, instead of paying a dividend, the firm decides to repurchase stock, a. What should be the repurchase price? b. How many shares should be repurchased? c. What if the repurchase price is set below or above your suggested price in part a? d. If you...
Explain why a firm might prefer a stock repurchase rather than an increase in the firm's regular dividend.
6. Stock repurchases Companies with excess cash often employ share repurchase plans in place of or along with cash dividends. Share repurchase plans can help investors liquidate their holdings by selling their stock to the issuing company and earning from capital gains. Consider the case of St. Sebastian Company: St. Sebastian Company has forecasted a net income of $5,300,000 for this year. Its common stock currently trades at $21 per share, and the company currently has 830,000 shares of common...
TI Problem Set 11 011-020 (Total 30 pts.: 3 pts each) CLEARLY indicate on your scantron the BEST answer to each of the following questions $2,100.000 Assume that the following data relative to Kane Company for 2018 is available: Net Income tax rate of 409) Change Transactions in Common Shares Jan 1, 2018, Beginning number Mar. 1. 2018, Purchase of treasury shares June 1, 2018, Stock split 2-1 Nov. 1. 2018, Issuance of shares (60.000) 640,000 120.000 Cumulative 700.000 640.000...
Problem Set 1: 011-020 (Total 30 pts.: 3 pts each) CLEARLY indicate on your scantron the BEST answer to each of the following questions Assume that the following data relative to Kane Company for 2018 is available: Net Income tax rate of 40%) $2,100,000 Change Cumulative Transactions in Common Shares 700.000 Jan. 1. 2018, Beginning number (60,000) 640.000 Mar. 1. 2018, Purchase of treasury shares 640.000 1.280.000 June 1, 2018, Stock split 2-1 120,000 1.400,000 Nov. 1. 2018, Issuance of...
Stock Repurchase A firm has 5 million shares outstanding with a market price of $35 per share. The firm has $40 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...