Complete a-e2 please and thank you The Cartton Corporation has $4 million in eamings after taxes and 1 million shares outstanding. The stock trades at a P/E of 10. The firmbax $1 million in excess cash.a. Compute the current price of the stock. (Do not round Intermediate calculations and round your answer to 2 decimal places.)b. If the $1 million is used to pay dividends, how much will dividends per share be? (Do not round intermediate calculations andround your answer to 2 decimal places.)c. If the $1 million is used to repurchase shares in the market at a price of $41 per share, how many shares will be acquired? (Do notround intermediate calculations and round your answer to the nearest whole share.)Mumber of shares acquiredsharesd. What will the new earnings per share be? (Use the rounded number of shares computed in part c but do not round any otherintermediate calculations. Round your answer to 2 decimal places.)e-1. If the P/E ratio remains constant, what will the price of the securities be? (Use the rounded answer from part d and round youranswer to the nearest whole dollar.)Stock pricee-2. By how much, in terms of dollars, did the repurchase increase the stock price? (Use the rounded whole dollar answer from partSellwithring Bound your norwer the nearest whole dollar) The Cartton Corporation has $4 million in eamings after taxes and 1 million shares outstanding. The stock trades at a P/E of 10. The firmbax $1 million in excess cash.a. Compute the current price of the stock. (Do not round Intermediate calculations and round your answer to 2 decimal places.)b. If the $1 million is used to pay dividends, how much will dividends per share be? (Do not round intermediate calculations andround your answer to 2 decimal places.)c. If the $1 million is used to repurchase shares in the market at a price of $41 per share, how many shares will be acquired? (Do notround intermediate calculations and round your answer to the nearest whole share.)Mumber of shares acquiredsharesd. What will the new earnings per share be? (Use the rounded number of shares computed in part c but do not round any otherintermediate calculations. Round your answer to 2 decimal places.)e-1. If the P/E ratio remains constant, what will the price of the securities be? (Use the rounded answer from part d and round youranswer to the nearest whole dollar.)Stock pricee-2. By how much, in terms of dollars, did the repurchase increase the stock price? (Use the rounded whole dollar answer from partSellwithring Bound your norwer the nearest whole dollar)

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The Cartton Corporation has $4 million in eamings after taxes and 1 million shares outstanding. The stock trades at a P/E of 10. The firm has $1 million in excess cash. a. Compute the current price of the stock. (Do not round Intermediate calculations and round your answer to 2 decimal places.) Current price b. If the $1 million is used to pay dividends, how much will dividends per share be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Dividenda per share c. If the $1 million is used to repurchase shares in the market at a price of $41 per share, how many shares will be acquired? (Do not round intermediate calculations and round your answer to the nearest whole share.) Number of shares acquired shares

The Cartton Corporation has $4 million in eamings after taxes and 1 million shares outstanding. The stock trades at a P/E of 10. The firm has $1 million in excess cash. a. Compute the current price of the stock. (Do not round Intermediate calculations and round your answer to 2 decimal places.) Current price b. If the $1 million is used to pay dividends, how much will dividends per share be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Dividenda per share c. If the $1 million is used to repurchase shares in the market at a price of $41 per share, how many shares will be acquired? (Do not round intermediate calculations and round your answer to the nearest whole share.) Number of shares acquired shares

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 11P

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