Share repurchase proposal: Currently, the firm has available capital (cash and net income) of approximately $7,000,000. There is a large block of stock available at $35 a share. For the sake of this exercise let us disregard tax implications and effects. Suppose the market price of the shares is $35.75 a share. Why do you think the seller of the large block would agree to see at $35 a share?
Share repurchase proposal: Currently, the firm has available capital (cash and net income) of approximately $7,000,000. There is a large block of stock available at $35 a share. For the sake of this exercise let us disregard tax implications and effects. Suppose the market price of the shares is $35.75 a share. Why do you think the seller of the large block would agree to see at $35 a share?
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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Transcribed Image Text:Share repurchase proposal: Currently, the
firm has available capital (cash and net
income) of approximately $7,000,000.
There is a large block of stock available at
$35 a share.
For the sake of this exercise let us disregard
tax implications and effects.
Suppose the market price of the shares is
$35.75 a share. Why do you think the seller
of the large block would agree to see at
$35 a share?
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