A firm has net income of $2.0 million and it has 1.0 million shares of common stock outstanding. The shares currently trade for $32 a share. The firm is planning to repurchase 15% of the shares. Assuming that the repurchase will have no effect on either net income or the firm?s P/E ratio, what will be its share price following the repurchase? Select one: A. $40.00 B. $37.65 C. $35.85 D. $32.65
A firm has 10 million common shares outstanding, currently trading at $150 per share for a total market value of $1.5 billion. If they split their stock 3 for 1, what should the share price be and how many share will be outstanding? Select one: A. $15 and 1 million shares B. $50 and 333,000 shares C. $50 and 30 million shares D. $450 and 30 million shares E. $450 and million shares
A company has a target capital structure that is 60% debt and 40% equity. The capital budget for next year will be $3.0 million. If they report net income for next year of $2.0 million and follow a residual dividend policy, what will its dividend payout percentage be?
A company has a target capital structure that is 60% debt and 40% equity. The capital budget for next year will be $3.0 million. If they report net income for next year of $2.0 million and follow a residual dividend policy, what will its dividend payout percentage be?
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| Problem 17-12 Bayani Bakery's most recent FCF was $47 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 11% and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $370 million in debt and $56 million in preferred stock. What is the value of operations? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. Immediately prior to the repurchase, what is the intrinsic value of equity?Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. Immediately prior to the repurchase, what is the intrinsic stock price? Round your answer to the nearest cent. How many shares will be repurchased? Round your answer to the nearest whole number. Immediately after the repurchase, what is the intrinsic value of equity? Round your answer to the nearest dollar. |
