Question
1. Company A has a market capitalization of $1,142,405,193 and 21,101,498 shares outstanding. It plans to distribute $58,340,521 through an open market repurchase. Assuming perfect
1. Company A has a market capitalization of $1,142,405,193 and 21,101,498 shares outstanding. It plans to distribute $58,340,521 through an open market repurchase. Assuming perfect capital markets: What will the price per share of the firm be right after the repurchase?
a. Corporation A currently has an enterprise value of $375,388,656 and $103,052,177 in excess cash. The firm has 12,484,134 shares outstanding and no debt. Suppose the firm uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMCs enterprise value to either $510,375,261 or $325,816,765. What is the firm's share price prior to the share repurchase?
b. Corporation A currently has an enterprise value of $377,983,450 and $94,553,295 in excess cash. The firm has 11,142,955 shares outstanding and no debt. Suppose the firm uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMCs enterprise value to either $546,537,437 or $325,258,187. What would the firm's share price be after the repurchase if its enterprise value goes up?
c. Corporation A currently has an enterprise value of $433,715,944 and $120,889,495 in excess cash. The firm has 10,778,970 shares outstanding and no debt. Suppose the firm uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMCs enterprise value to either $541,930,112 or $332,224,852. What would the firm's share price be after the repurchase if its enterprise value goes down?
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