Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I cannot get the last part. Repurchase EPS PE ratio Awake Corporation is evaluating an extra dividend versus a share repurchase. In either case, $16,000

image text in transcribed

image text in transcribed

I cannot get the last part. Repurchase EPS PE ratio

Awake Corporation is evaluating an extra dividend versus a share repurchase. In either case, $16,000 would be spent. Current earnings are $2.00 per share, and the stock currently sells for $50 per share. There are 2,500 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) Answer is complete and correct. Extra dividend Price per share $ 43.60 Shareholder wealth $ 50.00 Answer is complete and correct. Repurchase Price per share 50.00 Shareholder wealth 50.00 b. What will the company's EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is complete and correct. Extra dividend EPS PE ratio 2.00 21.80 Repurchase EPS PE ratio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Fundamentals of Advanced Accounting

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

5th edition

978-0077924379, 77924371, 978-0078025396, 78025397, 978-0077425654, 77425650, 978-0077667061

Students also viewed these Finance questions