Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company is planning to pay EUR 1 million in dividend to its common shareholders this year. Enclosed the following earnings and market price information

A company is planning to pay EUR 1 million in dividend to its common shareholders this year. Enclosed the following earnings and market price information for the company: Net income 1,500,000 Number of shares 200,000 Expected market price per share after the dividend payment: 17 The company is considering 2 options: Option 1 - repurchase share at a price of EUR 17 Evaluate the companys share price after the repurchase by calculating the EPS and estimated share price. Option 2 - announce a 5 for 1 share split for its shareholders Assuming that the company chose option 2, how many shares outstanding would the company have and what would be its EPS after the split?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions