Using the information from problem $3$ above,

suppose the firm announces it is going to repurchase

$$12,500$ worth of stock.

a$.$ What effect will this transaction have on the

equity of the company?

b$.$ How many shares will be outstanding?

c$.$ What will the price per share be after the

repurchase?

d$.$ Ignoring tax effects, show how the share

repurchase is effectively the same as a cash

dividend.

A frim has $30,000$ shares outstanding, and a par value

of $$0\mathrm{.}50$ per share.

a$.$ If the firm declares a $3-$for$-1$ stock split,

compute the new shares outstanding, and the

new par value after the split.

b$.$ If the firm declares a $1-$for$-4$ stock split,

compute the new shares outstanding, and the

new par value after the split.