Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / XVZ co

XVZ co

Finance

XVZ co. has 1 million shares outstanding and $5 million in earnings after taxes. The stock trades at a P/E ratio is 10. XYA co. has $4 million in excess cash.
1) What is the current price of the stock?

2) If the $4 million is used to pay dividends, how much will dividends Per share be.

3)  If the $4 million is used to repurchase shares in the market at a premium price of $54 per share, how many Mares will be reacquired?

4) What will the new EPS be?

 5) If the P/E remains constant, what will Me new price of the securities be? By how much, in terms of dollars, did the repurchase increase the share price?

6) Has the shareholder's total wealth changed as a result of the stock repurchase as opposed to the  cash dividend? 
 

Option 1

Low Cost Option
Download this past answer in few clicks

5.96 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE