A recent review of the shareholders of the company resulted in the decision to pursue a...

Transcribed Image Text:

A recent review of the shareholders of the company resulted in the decision to pursue a share buyback program. An investor has asked for a numerical analysis to show how many shares will be repurchased in lieu of dividends given the following information: Common shares issued and outstanding Proposed dividend this year: Cost of capital Future dividends 20,000,000 $20,000,000 10% $50,000,000 $520,000,000 with dividend cash $26.00 Firm value - total Current share price - with dividend a) Calculate the number of shares to repurchase. A recent review of the shareholders of the company resulted in the decision to pursue a share buyback program. An investor has asked for a numerical analysis to show how many shares will be repurchased in lieu of dividends given the following information: Common shares issued and outstanding Proposed dividend this year: Cost of capital Future dividends 20,000,000 $20,000,000 10% $50,000,000 $520,000,000 with dividend cash $26.00 Firm value - total Current share price - with dividend a) Calculate the number of shares to repurchase.

Answer rating: 100% (QA)

To calculate the number of shares to repurchase we need to determine the amount of ... View the full answer