AMC Corporation currently has an enterprise value of $390 million and $115 million in excess cash The firm has 20 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $500 million or $190 million What is AMC's share price after the repurchase if its enterprise value goes up? What is AMC's share price after the repurchase if its enterprise value declines? AMC's share price after the repurchase if its enterprise value goes up is (Round to two decimal places)

AMC Corporation currently has an enterprise value of $390 million and $115 million in excess cash The firm has 20 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $500 million or $190 million What is AMC's share price after the repurchase if its enterprise value goes up? What is AMC's share price after the repurchase if its enterprise value declines? AMC's share price after the repurchase if its enterprise value goes up is (Round to two decimal places)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 6MC: Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid...

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AMC Corporation currently has an enterprise value of $390 million and $120 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $590 million or $190 million. Suppose AMC management expects good news to come out. If management wants to maximize AMC's ultimate share price, will they undertake the repurchase before or after the news comes out? When would management undertake the repurchase if they expect bad news to come out? What effect would you expect an announcement of a share repurchase to have on the stock price? To maximize its share price, when will AMC prefer to repurchase shares? (Select the best choice below.) O A. After either good or bad news comes out. B. After good news and before bad news comes out. C. Before either good or bad news comes out. D. Before good news and after bad news comes out.…
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