You have collected the following information for a company:

Earnings after tax $1,320,000

Common shares outstanding 1,100,000

PE 17.00

Excess cash $550,000

Required (round all to 2 decimal places):

1) Compute the current price of the stock. Answer: $Answer

2) If the company uses the excess cash to pay a dividend, how much Answer: $Answer

will that be per share?

3) If the company uses the excess cash to repurchase shares in the Answer: Answer

market at a 10% premium over market price, how many shares

will be bought?

4) What will the new EPS be? Answer: $Answer

5) If the PE remains constant, what would you expect the new Answer: $Answer

market price of the common shares to be?