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TechGrow Inc. has the following financial position: • Market value equals book value • Excess cash: $2,400,000 • Operating assets: $15,600,000 • Total equity: $18,000,000 • Outstanding shares: 1,500,000 Net income: $3,200,000 The board has approved using 60% of excess cash for a share repurchase program. Calculate: 1. How many shares will remain outstanding after the repurchase? 2. What is the price per share for the repurchase? 3. What percentage of outstanding shares will be repurchased?

TechGrow Inc. has the following financial position: • Market value equals book value • Excess cash: $2,400,000 • Operating assets: $15,600,000 • Total equity: $18,000,000 • Outstanding shares: 1,500,000 Net income: $3,200,000 The board has approved using 60% of excess cash for a share repurchase program. Calculate: 1. How many shares will remain outstanding after the repurchase? 2. What is the price per share for the repurchase? 3. What percentage of outstanding shares will be repurchased?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 12P
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TechGrow Inc. has the following financial position: • Market value equals book value • Excess cash: $2,400,000 • Operating assets: $15,600,000 • Total equity: $18,000,000 • Outstanding shares: 1,500,000 Net income: $3,200,000 The board has approved using 60% of excess cash for a share repurchase program. Calculate: 1. How many shares will remain outstanding after the repurchase? 2. What is the price per share for the repurchase? 3. What percentage of outstanding shares will be repurchased?
Transcribed Image Text:TechGrow Inc. has the following financial position: • Market value equals book value • Excess cash: $2,400,000 • Operating assets: $15,600,000 • Total equity: $18,000,000 • Outstanding shares: 1,500,000 Net income: $3,200,000 The board has approved using 60% of excess cash for a share repurchase program. Calculate: 1. How many shares will remain outstanding after the repurchase? 2. What is the price per share for the repurchase? 3. What percentage of outstanding shares will be repurchased?
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