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A company has 20 million shares outstanding with a market price of $40 per share.The firm has $50 million in extra cash (short-term investments) that
A company has 20 million shares outstanding with a market price of $40 per share.The firm has $50 million in extra cash (short-term investments) that it will use for a future stock repurchase plan; the firm has no other financial investments or any debt.
[a] What is the companys value of operations after the stock repurchase?
[b] How many shares outstanding will remain after the repurchase?
[c] What is the expect impact on the share price of the company after the repurchase plan?
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