Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A firm has 5 million shares outstanding with a market price of $25 per share. The firm has $25 million in extra cash (short-term investments)

A firm has 5 million shares outstanding with a market price of $25 per share. The firm has $25 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.

$ million

How many shares will remain after the repurchase? Round your answer to the nearest whole number.

------------- shares

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

\f

Answered: 1 week ago