Question: Using the information from problem 3 above, suppose the firm announces it is going to repurchase $ 1 2 , 5 0 0 worth of

Using the information from problem 3 above, suppose the firm announces it is going to repurchase $12,500 worth of stock.
What effect will this transaction have on the equity of the company?
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.

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