Question: A firm has a market value equal to its book value. Currently, the firm has excess cash of $3,000 and other assets of $6,000. Equity

A firm has a market value equal to its book value. Currently, the firm has excess cash of $3,000 and other assets of $6,000. Equity is worth $9,000. The firm has 900 shares of stock outstanding and net income of $1,650. The firm has decided to spend all of its excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed?
A. 910 shares
B. 620 shares
C. 310 shares
D. 600 shares
E. 610 shares

Step by Step Solution

★★★★★

3.52 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

D 600 shares Shares of stock will be ou... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-M-A-P-C(4488).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Thomas has a five-stock portfolio that has a market value equal to $400,000. The portfolios beta is 1.5. Thomas is considering selling a particular stock to help pay some university expenses. The...

A securities firm has the following balance sheet (in millions): The debt securities have a coupon rate of 6 percent, 20 years remaining until maturity, and trade at a yield of 8 percent. The equity...

1. Which one of the following is a capital budgeting decision? A. determining how much debt should be borrowed from a particular lender *B. deciding whether or not to open a new store C. deciding...

1. The Spartan Co. has an unlevered cost of capital of 11%, a cost of debt of 8%, and a tax rate of 25%. What is the target debt-equity ratio if the targeted cost of equity is 12%?* (2 Points) 00: 2....

Boats and Balthas 74,000 shares outstanding that sell for a price of $70 per share. The stock has a par value of $2 per share. The company's balance sheet shows capital surplus of $165.000 and...

1)A firm has a market value equal to its book value. Currently, the firm has excess cash of $900, other assets of $5,100, and equity of $6,000. The firm has 600 shares of stock outstanding and net...

c) Respond to the following: "I want companies that pay dividends. Once a dollar is paid out I have it for sure, whereas I face a lot of risk when dividends are not paid." (3 marks) Assume you own...

2. A firm has a market value equal to its book value. Currently, the firm has excess cash of $600 and other assets of $5,400. Equity is worth $6,000. The firm has 400 shares of stock outstanding and...

Show that 15 is an inverse of 7 modulo 26.

b) c) d) Define 'accounting' (3 marks) Explain TWO (2) internal users and TWO (2) external users of financial statement. (4 marks) Differentiate between sole proprietorship and company. (6 marks) For...

* E6.23 (LO 6) (Petty Cash) The petty cash fund of Teasdales Auto Repair Service, a sole proprietorship, contains the following. 1. Coins and currency $ 10.20 2. Postage stamps 7.90 3. An I.O.U. from...

1.1 Illustrate the following with supply and demand curves: a. In June 2015, a Chinese gaming company won a charity auction for lunch with Warren Buffett on a Friday night with a bid of $2,345,678....

If mirror Mz in a Michelson interferometer (Figure) is moved through 0.233mm, a shift of 792 bright fringes occurs. What is the wavelength of the light producing the fringepattern? Movable mirror M2...

A thin film with index of refraction n = 1.40 is placed in one arm of a Michelson interferometer, perpendicular to the optical path. If this causes a shift of 7.0 bright fringes of the pattern...

In Figure an airtight chamber of length d = 5.0 cm is placed in one of the arms of a Michelson interferometer. (The glass window on each end of the chamber has negligible thickness.) Light of...

need all 1. 2. 4. Problem 10,06 (Cost of Common Equity) eBook Problem Walk Through The future carings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow $ per year....

A firm offers terms of 2/15, net 45. (Enter your answers as directed, but do not round intermediate calculations.) Requirement 1: What effective annual interest rate does the firm earn when a...

This is the final Question I need the answer for part (E) Jack OBoyle and David O'Brien are district managers for C&M Inc., a leading supplier of construction equipment. Over the years as they moved...