XYZ Corporation has 4 million earnings after tax and 1 million shares outstanding The stock trades at

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XYZ Corporation has 4 million earnings after tax and 1 million shares outstanding The stock trades at a P/E ratio of 10 The firm has 3 million in excess cash

a. Compute the current price of the stock

b. If the 3 million is used to pay dividends, how much will dividends per share be

c. If the 3 million is used to repurchase shares in the market at a premium price of 43.00 per share how many shares will be reacquired?

d. what will the new earnings per share be

e. if the P/E remains constant what will the new market price

Related Book For answer-question

Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt , Eugene F. Brigham

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Posted Date: Mar 03, 2021 08:54 AM

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XYZ Corporation has 4 million earnings after tax and 1 million shares outstanding The stock trades at

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Corporate Finance A Focused Approach

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