Question: Please Help with these 2 problems. Thank you Problem1: Problem 2: A stock is currently trading for $37. The company has a price-earnings multiple of

Please Help with these 2 problems. Thank you

Problem1:

Please Help with these 2 problems. Thank you Problem1: Problem 2: A

Problem 2:

stock is currently trading for $37. The company has a price-earnings multiple

A stock is currently trading for $37. The company has a price-earnings multiple of 10 . There are 100 million shares outstanding. Your model indicates that the stock is actually worth $47. The company announces that it will use $350 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. $ 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 $350 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 $350 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. A stock is currently trading for $31. The company has a price-earnings multiple of 10 . There are 100 million shares outstanding. Your model indicates that the stock is actually worth $26. 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. $ 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

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!