Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Allison's has a market value equal to its book value. Currently, the firm has excess cash of $1,100 and other assets of $12,400. Equity is

Allison's has a market value equal to its book value. Currently, the firm has excess cash of $1,100 and other assets of $12,400. Equity is worth $13,500. The firm has 2,700 shares of stock outstanding and net income of $10,800. The firm uses its excess cash to complete a stock repurchase.

What will be the change in price-to-earnings ratio?

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_2

Step: 3

blur-text-image_3

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

Applied Financial Macroeconomics And Investment Strategy

Authors: Robert T McGee

1st Edition

1137428394, 978-1137428394

More Books

Students also viewed these Finance questions

Question

1. What was reviewed?

Answered: 1 week ago

Question

=+ Where would most corporations like the balance to fall?

Answered: 1 week ago