Question
The owners of HM Hornes Company are several wealthy Texans. The company earned $3.5 million after taxes this year, with 1.0 million shares outstanding, earnings
The owners of HM Hornes Company are several wealthy Texans. The company earned $3.5 million after taxes this year, with 1.0 million shares outstanding, earnings per share were $3.50, shares have recently sold for $72.00. among current shareholders. Two dollars of this value is explained by investors' anticipation of a cash dividend. As Chief Financial Officer of HM Hornes, you have completed the alternative of repurchasing some of the company's common stock with a self-purchase offer at $72.00 per share.
- How many common shares can the company repurchase if it selects this alternative?
- What is the earnings per share after the buyback?
- What is the most convenient option between paying cash dividends or repurchasing?
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
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