In the previous problem, suppose the company has announced it is going to repurchase $18,000 worth of
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In the previous problem, suppose the company has announced it is going to repurchase $18,000 worth of stock instead of paying a dividend. 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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Related Book For
Essentials of Corporate Finance
ISBN: 978-0078034756
8th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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