Assume a perfect capital market. Which of the following values tends to increase if a company uses

Fantastic news! We've Found the answer you've been seeking!

Question:

Assume a perfect capital market. Which of the following values tends to increase if a company uses excess cash to buy back shares?

a. Total equity value

b. The number of shares

c. Total earnings

d. The required return of equity/ROE

e. Share price

Related Book For answer-question

Statistical Techniques in Business and Economics

ISBN: 978-0078020520

16th edition

Authors: Douglas Lind, William Marchal

See More Books

Posted Date: Jan 06, 2021 09:01 PM

See More Questions

A recent national survey found that high school students watched an average (mean) of 6.8 DVDs per month with a population standard deviation of 1.8. The distribution of DVDs watched per month...
A recent national survey found that high school students watched an average (mean) of 6.8 DVDs per month, with a population standard deviation of 0.5 DVDs per month. The distribution of the number of...
A guidance counselor claims that high school students in a college preparation program have higher ACT scores than those in a general program. The mean ACT score for 49 high school students who are...
Will has a business loan of $100,000, it is for 7 years with an interest rate of 9%. How much interest would he pay over those 7 years?
Suppose that sales of a household appliance are reported to be 13,000 units during the first quarter of the year. The seasonal index for the first quarter is 1.24. Use this information to make a...
The cost of capital always depends on the risk of the project being evaluated. Therefore the company cost of capital is useless. Do you agree?
Outline the steps involved in: (a) planning (b) executing (c) reporting (d) following up an internal audit.
On August 8, 2014, Holly purchased a residential apartment building. The cost basis assigned to the building is $800,000. Holly also owns another residential apartment building that she purchased on...
ces Saved Northern Washington Lumber Company grows, harvests, and processes timber for use as building lumber. The following data pertain to the company's sawmill: Work-in-process inventory, January...
1. (4) A blood pressure of 110 mm Hg is measured using a cuff over the wrist which is positioned 30 cm above heart level. According to Bernoulli's equation(given below), what is the blood pressure at...
2. Evaluate . (V x F). ds, where S is the surface of the paraboloid x2 + y2 + z = 4 above the xy-plane and F = (x + y 4) i + 3 xy + (2 xz + z) k. Ans. - 4 n
1. The MC describes the state of stress of our point in the field. That is, the MC shows us the values of the two principal stresses and the value of the maximum shear stress that the point is...
Problem: the Solow growth model with a Cobb-Douglas technology of production. Consider the following continuous-time economy with time indexed by t 0. The economy is populated by identical...
Business Costs Product or Period Cost Variable or Fixed Cost Per Unit Cost (Variable) Annual Cost (Fixed) Artist - contract Product Fixed $10,000 Artist - design fee Product Fixed $3,600...
Suppose we are comparing two cities, A and B. Cities A and B are the same in every respect, other than city A having a larger employment multiplier than city B. Using two graphs, one for city A and...
Analyze the sources of funds and types of deposits. (Balance sheet structure) Analyze the main uses of funds. Assets: Real Estate Loans Commercial Loans Individual Loans Agricultural Loans Other...
Kelsy is retiring at the end of the year and plans to withdraw $2,500.00 from her retirement account at the end of each quarter for the next 20 years. If the money in the retirement account earns 6%...
Dan and Diana file a joint return. Dan earned $31,000 during the year before losing his job. Diana received Social Security benefits of $5,000. a. Determine the taxable portion of the Social Security...
A film alliance used a random sample of 50 U.S. citizens to estimate that the typical American spent 78 hours watching videos and DVDs last year. The standard deviation of this sample was 9 hours. a....
The president of Blitz Sales Enterprises sells kitchen products through television commercials, often called infomercials. He gathered data from the last 15 weeks of sales to determine the...
According to the Census Bureau, 3.13 people reside in the typical American household. A sample of 25 households in Arizona retirement communities showed the mean number of residents per household was...
The number on the jersey of each New York Giants football player is recorded, then the mean of those numbers is computed. Decide whether the statement makes sense (or is clearly true) or does not...
A professor calculates final grades using a weighted mean in which the final exam counts twice as much as the midterm. Decide whether the statement makes sense (or is clearly true) or does not make...
The following ages (years) of survey respondents: 22, 19, 21, 27, over 65, over 80. State whether the mean or median would give a better description of the average. Explain your reasoning.

Assume a perfect capital market. Which of the following values tends to increase if a company uses

Question:

Expert Answer:

Answer is E share price A share buyback raises the cost of sha... View the full answer

Statistical Techniques in Business and Economics

Students also viewed these accounting questions