Question
Google Corporation recently had a market value of equity of $ 180 billion with 1.5 billion shares outstanding. The book value of its equity is
Google Corporation recently had a market value of equity of $ 180 billion with 1.5 billion shares outstanding. The book value of its equity is $9 billion. (Word limit is 250 to 300 words)
a) What is Googles' stock price per share? What is its book value per share? (1 Marks)
b) If the company repurchases 30 million shares in the stock market at their current price, how will this affect the book value of equity if all else remains the same. (2 Marks)
c) If there are no taxes or transaction costs, and investors do not change their perceptions of the firm, what should the market value of the firm be after the repurchase? (1 Marks)
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