Question: Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 8: A firm has a market value equal to its

Please show all calculations and formulas.If using Excel, please show data, formulas, etc.

Practice example 8:

A firm has a market value equal to its book value. Currently, the firm has excess cash of $300 and other assets of $6,200. Equity is worth $5,000. The firm has 500 shares of stock outstanding and net income of $720. What will the new earnings per share be if the firm uses its excess cash for a stock repurchase?

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!

2. Quaker State Wings has 325,000 shares outstanding and net income of $985,000. The company stock is currently selling for $62.84 per share. If the company repurchases $635,000 of its stock, what is...

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...

A rm has a market value equal to its book value. Currently. the rm has excess cash of $1,000 and other assets of $3,000' Equity is worth $4,000' The rmhas 500 shares of stock outstanding and net...

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 3: An unlevered firm has expected earnings of $2,401 and a market value of equity of...

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 10: Fabric Outlet has 17,500 shares of stock outstanding with a par value of $1 per share....

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 5: You have decided to retire and want to sell your shares in a closely held, all equity...

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 9: Pluto's has 14,000 shares of stock outstanding with a par value of $1 per share. The...

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 11: Jupiter stores had a Quarter 2 beginning cash balance of $430. Sales for Quarters 1...

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 6: Houston Tools has expected earnings before interest and taxes of $236,800, an unlevered...

Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 4: BL Plastics is an all equity firm that has 27,000 shares of stock outstanding. The...

Let u(x1, x2) = In(r1) +2ln(x2). If pi = p2 = 1, will this person be risk loving, risk neutral, or risk averse when offered gambles over different amounts of income m?

Zubi Plc is a furniture manufacturing company and is in business from 10 years. It has large multinational and national banks as a customer. The following are the purchases and issues during the...

Answer for me Please answer ant q 2 3 4 5 6 7 8 9 10 True or false? A new patient who shows up at the medical office and wants to have a physical examination done should be seen on the same day even...

Who are the stakeholders in this case? What did Kerviel do wrong? What did SocGen do wrong? Identify the ethical violations that occurred in this case. Would the outcome have been different if...

Paper Printing Company purchased a copy machine for $65,000 on January 1, 2010. The copy machine had an estimated useful life of five years or 1,000,000 copies. Paper Printing estimated the copy...

1. What do you think is causing some of the problems in the bank home office and branches? 2. Do you think setting up an HR unit in the main office would help? 3. What specific functions should an HR...

Spirit Company produces baseball caps. The company incurred the following costs to produce 12,000 caps last month: Cardboard for the brims ........ $4,800 Cloth .............. 12,000 Plastic for...

Transvaal Mining Tools Ltd. of South Africa makes specialty tools used in the mining industry. The company uses an activity-based costing system for internal decision-making purposes. The company has...

Design a minimum-mass symmetric three-bar truss (the area of member 1 and that of member 3 are the same) to support a load P, as was shown in Fig. 2.9. The following notation may be used: Pu = P cos...

What are the primary functions of end user support?

What do network management software systems do and why are they important?

What is TCO?