5. Stock repurchases Overholser Inc. has forecast net income of $8,000,000 over the next year. Overholser also forecasts a capital budget of $8,000,000 for the year. If the firm maintains its capital budget of 50% equity and 50% debt, how much of a dividend can Overholser pay if it follows a strict residual dividend policy? $5,000,000 $9,000,000 $7,000,000 $8,000,000 $4,000,000 Instead of paying a cash dividend, Overhoiser is considering a stock repurchase. The firm currently has 1,500,000 shares of common stock outstanding that have a current market price of $80 per share. If Overholser carries out the repurchase, it expects to be able to buy the stock at its current market price. What is Overholser's current price-to-earnings (P/E) ratio? 14.00 11.00 15.00 12.00 13.00 If Overholser has the amount predicted by the residual dividend model available to pay to shareholders, how many shares can it repurchase? 25,000 shares 62,500 shares 87,500 shares 50,000 shares 37,500 shares If the firms P/E ratio is expected to be the same after the repurchase, what is Overholser's expected stock price after the repurchase? $84.21 $87.14 $86.25 $82.76 $85.71