Share repurchase: In order to reduce the number of outstanding shares company sometimes buys its own shares from the market. This is called as share repurchase. Repurchasing is possible only when the firm has excess cash and firm decides to use this surplus to purchase its own shares instead of paying a dividend to the shareholders. To determine: The incorporation of share repurchases into the valuation of a stock.

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Chapter 7, Problem 7CT

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Share repurchase: In order to reduce the number of outstanding shares company sometimes buys its own shares from the market. This is called as share repurchase. Repurchasing is possible only when the firm has excess cash and firm decides to use this surplus to purchase its own shares instead of paying a dividend to the shareholders.

To determine:

The incorporation of share repurchases into the valuation of a stock.

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