In the previous problem, suppose Ferguson has announced it is going to repurchase $15,600 worth of stock.
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In the previous problem, suppose Ferguson has announced it is going to repurchase $15,600 worth of stock. What effect will this transaction have on the equity of the firm? How many shares will be outstanding?
What will the price per share be after the repurchase? Ignoring tax effects, show how the share repurchase is effectively the same as a cash dividend.
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Repurchasing the shares will reduce shareholders equity by 1560000 Shares bough...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861704
11th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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