The balance sheet for Levy Corp. is shown here in market value terms. There are 12,000 shares
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The balance sheet for Levy Corp. is shown here in market value terms. There are 12,000 shares of stock outstanding.
Market Value Balance Sheet | |||
Cash | $55,000 | Equity | $465,000 |
Fixed Assets | 410,000 | ||
Total | $465,000 | Total | $465,000 |
Share Repurchase Suppose Levy has announced it is going to 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.
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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