Question: Please give all answer blanks. I will not connect elsewhere. please ensure that answers are correct. i will give a thumbs up if correct. A
A stock is currently trading for $38. The company has a price-earnings multiple of 10 . There are 100 million shares outstanding. Your model indicates that the stock is actually worth $33. The company announces that it will use $330 million to repurchase shares. a. After the repurchase, what is the value of the stock, according to your model? Do not round intermediate calculations. Round your answer to the nearest. cent. 5 b. After the repurchase, what is the actual price-earnings multiple of the stock? Do not round intermediate calculations. Round your answer to two decimal places. c. If the company had used the $330 million to pay a cash dividend instead of doing a repurchase, how would the value of the stock have changed, according to your model? Do not round intermediate calculations, Round your answer to the nearest cent. The market value of the stock is now $ d. If the company had used the $330 million to pay a cash dividend instead of doing a repurchase, what would be the actual price-earnings multiple after the dividend? Do not round intermediate calculations. Round your answer to two decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
