onal Inc. believes that at its current stock price of P15.00 the firm is undervalued in the market. National plans to repurchase 2,400,000 of its 20,000,000 shares outstanding. The firm’s managers expect that they can repurchase the entire 2,400,000 shares at the expected equilibrium price after repurchase. The firm’s current earnings are P44,000,000. If management’s assumptions hold, what is the expected per-share market price after repurchase? Use 5 decimal places in your computation
onal Inc. believes that at its current stock price of P15.00 the firm is undervalued in the market. National plans to repurchase 2,400,000 of its 20,000,000 shares outstanding. The firm’s managers expect that they can repurchase the entire 2,400,000 shares at the expected equilibrium price after repurchase. The firm’s current earnings are P44,000,000. If management’s assumptions hold, what is the expected per-share market price after repurchase? Use 5 decimal places in your computation
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
National Inc. believes that at its current stock price of P15.00 the firm is undervalued in the market. National plans to repurchase 2,400,000 of its 20,000,000 shares outstanding. The firm’s managers expect that they can repurchase the entire 2,400,000 shares at the expected equilibrium price after repurchase. The firm’s current earnings are P44,000,000. If management’s assumptions hold, what is the expected per-share market price after repurchase? Use 5 decimal places in your computation
Format: 11.11
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education