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In previous problem (Exercise 6), suppose the company has announced it is going to repurchase $22,400 worth of stock. What effect will this transaction have
In previous problem (Exercise 6), suppose the company has announced it is going to repurchase $22,400 worth of stock. What effect will this transaction have on the equity of the company? How many shares will be outstanding? What will the price per share be after the repurchase? Ignoring tax effects, show how the share repurchase is effectively the same as a cash dividend
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