Ask Question
BusinessBusiness
24 May, 05:01

A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,000 and other assets of $5,000. Equity is worth $6,000. The firm has 600 shares of stock outstanding and net income of $700. The firm has decided to spend all of its excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed? Group of answer choices

+2
Answers (1)
  1. 24 May, 06:34
    0
    500

    Explanation:

    The computation of Total outstanding shares is shown below:-

    Market Value of Shares before Share repurchase = Equity : Number of Shares outstanding

    = $6,000 : 600

    = $10

    Shares repurchased = Excess Cash : Price of a Share

    = $1,000 : 10

    = 100

    Total Outstanding Shares = Number of Shares outstanding - Shares repurchased

    = 600 - 100

    = 500

    We applied the above formula.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,000 and other assets of $5,000. Equity is ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Teno industries inc. is a manufacturing company based in texas. in the year after teno industries implemented a comparable-worth policy, its expenses increased, and as a result, profits declined.
Answers (1)
Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.
Answers (1)
Super Tread Inc. is a large manufacturer of auto tires. Super Tread has provided the following information: Sales Revenue $55,000 Beginning Finished Goods Inventory 15,500 Cost of Goods Sold 37,500 Cost of Goods Manufactured 44,500 Calculate the
Answers (1)
Events that occur after the December 31, 2021 balance sheet date, but before the balance sheet is issued, and provide additional evidence about conditions that existed at the balance sheet date and affect the realizability of accounts receivable
Answers (1)
Broadbent's model is called an early selection model because
Answers (1)
New Questions in Business
What is a car loan? a way to pay in advance for using a car for a given time period a way to pay for a car that is dependent on the number of miles you drive a way to borrow money from a bank or financial institution to pay for a car?
Answers (1)
Horton Industries' shareholders' equity included 140 million shares of $1 par common stock and a balance in paid-in capital - excess of par of $1,120 million.
Answers (1)
Why do price discrimination and the existence of slightly different variants of the same product tend to go hand in hand? By introducing slightly different variants of the product, firms that price discriminate are able to
Answers (1)
On April 1, 2017, Planet Services received $8,000 in advance of performing the services from a customer for three months of service long dash - April, May and June.
Answers (1)
The founder and former ceo fo jones soda peter van stock claime that sharing the core values of your loyal customer base is just good for buisness. if you wanted to integrate this business philosophy into your own company you would study
Answers (1)
Home » Business » A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,000 and other assets of $5,000. Equity is worth $6,000. The firm has 600 shares of stock outstanding and net income of $700.
Sign Up Forgot Password?