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000 A listed company realizes a net profit of 150 m. The capital is divided in 10,000 shares. The stock price is 150. The
000 A listed company realizes a net profit of 150 m. The capital is divided in 10,000 shares. The stock price is 150. The company decides to buyback 10% of its own shares at 150 per share. The interest rate after tax is 5%. Questions 1 to 4 (0,5 point per question, 2 points in total) 1. Please calculate the cost of the transaction in two cases: (a) Buyback at 150 per share, (b) Buyback at 390 per share? 2. Please calculate the financial impact of the transaction on the company's net profit in the two cases? 3. Please calculate the net profit after the transaction in the two cases? 4. Please calculate the EPS before and after the transaction in the two cases? In which case is the transaction accretive?
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1 a Buyback at 150 per share The cost of the transaction 10000000 shares x 150 1500000000 b Buyback ...Get Instant Access to Expert-Tailored Solutions
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