Question: In problem 19.5, suppose that Levy has announced it will repurchase $22,800 worth of stock. What effect will this transaction have on the equity of

In problem 19.5, suppose that Levy has announced it will repurchase $22,800 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.
In problem 19.5

Market Value Balance Sheet Cash Fixed assets S 55,000 410,000 Equity S465,000 Total $465,000 $465,000 Total

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