Last year Earning | Declared Dividend | No of Shares | Market price | Earning Per Share= Declared Dividen/ No of shares | PR ratio = Market Price/ Earning Per Share | |
2,000,000,000 | 1,200,000,000 | Current Share | 8,000,000 | 3 | 150.00 | 0.02 |
New Share | 8,000,000 | 3 | 75 | 0.04 | ||
Total Share | 16,000,000 |
So as per above calculation if repurchase option is executed then PE ration is going to be double as stock is undervalued as of now.
corporate finance show workings Floro Corporation has 8,000,000 shares outstanding with a Market price of K3...
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Question 1. Aretha Corporation has 8000000 Shares out standing with a market price of * 3.75 per Share. The company's board of directors has decaded to pay 60% of its last net earnings of $20,000,ooo either as Cash dividend or stock repurchase. Required (a show the effect of a cash dividend on the Corporations price earnings Ratio (4 marks] b . show how the effect of a stock re-purchase on the Corporations price earnings...
14. The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax is 20%, and investors pay no taxes on dividends, capital gains, or interest income. Investors had expected the Corporation to pay out the $350 million through a share repurchase. Suppose instead that the Corporation announces it will permanently retain the cash, and use the interest on the cash to pay a regular dividend. If there are no other benefits of retaining the cash,...
14. The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax is 20%, and investors pay no taxes on dividends, capital gains, or interest income. Investors had expected the Corporation to pay out the $350 million through a share repurchase. Suppose instead that the Corporation announces it will permanently retain the cash, and use the interest on the cash to pay a regular dividend. If there are no other benefits of retaining the cash,...
The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax is 20%, and investors pay no taxes on dividends, capital gains, or interest income. Investors had expected the Corporation to pay out the $350 million through a share repurchase. Suppose instead that the Corporation announces it will permanently retain the cash, and use the interest on the cash to pay a regular dividend. If there are no other benefits of retaining the cash, how...
The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax is 20%, and investors pay no taxes on dividends, capital gains, or interest income. Investors had expected the Corporation to pay out the $350 million through a share repurchase. Suppose instead that the Corporation announces it will permanently retain the cash, and use the interest on the cash to pay a regular dividend. If there are no other benefits of retaining the cash, how...
The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax is 20%, and investors pay no taxes on dividends, capital gains, or interest income. Investors had expected the Corporation to pay out the $350 million through a share repurchase. Suppose instead that the Corporation announces it will permanently retain the cash, and use the interest on the cash to pay a regular dividend. If there are no other benefits of retaining the cash, how...
Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding, with a current market price of $15 per share. Natsam’s board has decided to pay out this cash as a one-time dividend . a. What is the ex-dividend price of a share in a perfect capital market? b. If the board instead decided to use the cash to do a one-time share repurchase, in a perfect capital market what is the price...
The Dunn Corporation is planning to pay dividends of $480000. There are 240000 shares outstanding, and earnings per share are $5. The stock should sell for $50 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 own 100 shares,...
On July 1, Jones Corporation had the following capital structure: Common Stock, par $1; 8,000,000 authorized shares, 100,000 issued and outstanding Additional Paid-in Capital Retained Earnings Treasury Stock $100,000 90,000 170,000 None Required: Complete the following table based on two independent cases involving stock transactions: (Round "per share" answers to 2 decimal places.) Case 1: The board of directors declared and issued a 100 percent stock dividend when the stock price was $8 per share. Case 2: The board of...
On July 1, Jones Corporation had the following capital structure: Common Stock, par $1; 8,000,000 authorized shares, 160,000 issued and outstanding $ 160,000 Additional Paid-in Capital 108,000 Retained Earnings 188,000 Treasury Stock None Required: Complete the following table based on two independent cases involving stock transactions: (Round "per share" answers to 2 decimal places.) Case 1: The board of directors declared and issued a 100 percent stock dividend when the stock price was $6 per share. Case 2: The board...