Question
A company is planning to pay EUR 3 million in dividend to its common shareholders this year. Enclosed the following earnings and market price information
A company is planning to pay EUR 3 million in dividend to its common shareholders this year. Enclosed the following earnings and market price information for the company:
Net income 6.500.000 Number of shares 150.000 Expected market price per share after the dividend payment: 42
Option A - repurchased shares at a price of EUR 42, evaluate the companys share price after the repurchase by calculating the EPS and estimated share price. Option B - announce a 3 for 1 share split for its shareholders, assuming that the company chose option B, 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started