Stanton Co. has 7 milhou conmon shares outstanding with a market price of $11 per s has $12 million in extra cash that it plans to use in a stock repurehase What is the firm's value of operations? How many shares will remain after the repurchase? What are two advantages of stock repurchases as compared to dividends? What are two disadvantages of stock repurel to dividend-

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
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Problem 1:
Stanton Co. has 7 milhou common shares outstanding with a market price of $11 per share: The firm
has $12 million in extra cash that it plans to use in a stock repurchase
What is the firm's value of operations?
How many shares will remain after the repurchase?
What are two advantages of stock repurchases as compared to dividends?
P.
What are two disadvantages of stock repurchases as compared to dividends?
Transcribed Image Text:Problem 1: Stanton Co. has 7 milhou common shares outstanding with a market price of $11 per share: The firm has $12 million in extra cash that it plans to use in a stock repurchase What is the firm's value of operations? How many shares will remain after the repurchase? What are two advantages of stock repurchases as compared to dividends? P. What are two disadvantages of stock repurchases as compared to dividends?
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