Brightland Inc. has a market value equal to its book value. Currently, the firm has excess cash of $1,500, other assets of $5,800, and equity valued at $5,000. The firm has 250 shares of stock outstanding and net income of $500. What will the new earnings per share be if the firm uses 30 percent of its excess cash to complete a stock repurchase?
Brightland Inc. has a market value equal to its book value. Currently, the firm has excess cash of $1,500, other assets of $5,800, and equity valued at $5,000. The firm has 250 shares of stock outstanding and net income of $500. What will the new earnings per share be if the firm uses 30 percent of its excess cash to complete a stock repurchase?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Brightland Inc. has a market value equal to its book value. Currently, the
firm has excess cash of $1,500, other assets of $5,800, and equity valued
at $5,000. The firm has 250 shares of stock outstanding and net income of
$500. What will the new earnings per share be if the firm uses 30 percent
of its excess cash to complete a stock repurchase?
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