Companies with excess cash often employ share repurchase plans in place of or along with cash dividends. Share repurchase plans can help investors liquidate thelr holdings by selling their stock to the issuing company and earning from capital gains. Consider the case of Sixty-second Avenue Company: Sixty-second Avenue Company expects to earn $5,300,000 this year. The company currently has 790,000 shares outstanding, and the shares have a per-share market price of $19. Assuming that Sixty-second Avenue's price-to-earnings (P/E) ratio remains constant and its earnings are un affected by a share repurchase transaction, then the company's expected market price per share-If it repurchases 80,000 shares at the current market price should be Which of these factors are considered an advantage of a stock repurchase? Check all that apply. A repurchase can remove a large block of stock that is overhanging the market and keeping the per share price depressed. The price of the firm's stock might benefit more from cash dividends than from a repurchase. When a firm distributes cash by repurchasing stock, stockholders have the option to either sell or not sell stock. Sixty-Second Avenue Company expects to earn $5,300,000 this year. The company currently has 790,000 shares outstanding, and the shares have a per-share market price of $19. Assuming that Sixty-second Avenue's price-to-earnings (P/E) ratio remains constant and its earnings are unaffected by a share repurchase transaction, then the company's expected market price per share-if it repurchases 80,000 shares at the current market price- should be Which oft $25,33 frs are considered an advantage of a stock repurchase check all that apply. $21.11 use can remove a large block of stock that is overhanging the market and keeping the per-share price depressed. $24.28 of the firm's stock might benefit more from cash dividends than from a repurchase. $20.05 m distributes cash by repurchasing stock, stockholders have the option to either sell or not sell stock. S Certificate of Stact Companies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the following case: Mainway Toy Company currently has 10,000 shares of common stock outstanding. Its management believes that its current stock price of $100 per share is too high. The company is planning to conduct stock splits in the ratio of 3 for 1 as described in the animation. $12 If Mainway Toy Company declares a 3-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be Fuzzy Muffin Manufacturing Company is one of Mainway's leading competitors. Fuzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announcing a stock split, influencing the distribution policy makers. Consequently, executives at Fuzzy Muffin decide to offer stock dividends to its shareholders. A stock dividend is another way of keeping the stock price from going too high. Fuzzy Muffin currently has 1,100,000 shares of common stock outstanding. If the firm pays a 3% stock dividend, how many shares will the firm issue to its existing shareholders? 34,650 shares 29,700 shares 28.050 shares 33,000 shares IF Mainway Toy Company dedares a 3-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be Fuzzy Muffin Manufacturing Company is one of $200.00 leading competitors. Fuzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announcing a $400.00 influencing the distribution policy makers. Consequently, executives at Fuzzy Muffin decide to offer stock dividends to its shareholders. $33.33 A stock dividend is another way of keeping the from going too high. Fuzzy Muffin currently has 1,100,000 shares of common stock $300.00 outstanding $50.00 If the firm pays a 3% stock dividend, how marly smres do the firm issue to its exsting shareholders