User Account

All Pages

Calculate falcon price-earnings ratio

Assignment Help Business Management
Reference no: EM131609418

Share buybacks are sometimes motivated by the desire to increase earnings per share. Falcon Ltd recorded an operating profit of $2 million in the last financial year. It has 4 million shares on issue and the market price of the shares is $5 each. Falcon announces that it will repurchase 10 per cent of each shareholder's shares at $5 per share.

a) Calculate Falcon's price-earnings ratio before the buyback.

b) An observer comments as follows: 'Falcon's buyback should boost its earnings per share from 50 cents to 55 cents, so with the price-earnings ratio remaining the same, the share price should increase'.

i) If the observer's argument is correct, what will Falcon's share price be after the buyback?

ii) Critically evaluate the observer's argument.

Reference no: EM131609418

Questions Cloud

Write a summary of study conduct which includes description : Write a summary of the study conducted which includes a description of the intended outcome and a description of the population selected to participate.
Describe the organization of police agencies at the local : Identify major organizational theories associated with policing. Describe the organization of police agencies at the local
Advise asic whether alan has breached of corporations act : Advise ASIC whether Alan has breached s180 of the Corporations Act 2001 (Cth). Include in your answer any possible defences
What importance does divestitures : What importance does divestitures, restructuring and corporate governance play in the business society in the 21st century?
Calculate falcon price-earnings ratio : a) Calculate Falcon's price-earnings ratio before the buyback.
What would you advise the importer to do : What would you advise the importer to do? What would happen if the imported took your advice yet instead of the dollar weakening, the dollar actually.
Discuss the rational basis test and the strict scrutiny test : Explain the difference between the rational basis test and the strict scrutiny test and how each impacts the burden of proof
Which would functional team be and why : If you were assigned to work a year in one of the following types of teams and had to choose only one, which would functional team be and why?
Proposed evidence-based practice change : Discuss the link between the PICOT statement, the research articles, and the nursing practice problem you identified.

Reviews

Write a Review

Business Management Questions & Answers

  Explain organizational behavior obob is an applied

explain organizational behavior obob is an applied behavioral science that draws on five behavioral science

  Estimation forecasting and auditing correlations

Cost estimation forecasting and auditing correlations - importance of auditing often goes undervalued in many of today's struggling organizations.

  The main issue and outcome in the identified real-world

Examine your state's policy on employment-at-will. Analyze at least one (1) real-world example of an employee or employer utilizing your state's employment-at-will doctrine in the last five (5) years. Include a summary of the main issue and outcome i..

  Maiximum number of six letter words

An anthropologist finds an isolated tribe whose written alphabet contains only 6-letters. The tribe has a taboo against using the same letter twice in same word.

  Charleston industrial revised its dividend policy and

charleston industrial revised its dividend policy and decided that it wants to maintain a retained earnings account of

  Imagine you are applying for a visa credit card

Imagine you are applying for a Visa credit card and asking for a credit limit of $15,000. While there is no set policy for reviewing and raising credit limits, the company's policy explicitly states that new customers may only receive a $7,500..

  Employee developmentwhat factors influence the choice of

employee developmentwhat factors influence the choice of evaluation design? which of these factors would have the

  Inputs for the productivity improvements

Analyze the trade-offs between inputs for the productivity improvements. Analyze the advantages and disadvantages of global sourcing versus producing in the U.S.

  Description of research method

how can you demonstrate that the relationship between leaders and their subordinates can have an adverse affect on the decision making process of the leader?

  Synthesize the concept of motivation and examine the substan

Synthesize the concept of motivation, and examine the substantial reasons why motivation is difficult to understand. Evaluate the potential effectiveness of the model positioning of motivation, and propose at least one (1) action that the organizatio..

  Training and development function of hrm

Name and explain or define the goals of the training and development function of HRM.

  Basic motivation model description and benefitspart

basic motivation model description and benefitspart 1explain the basic motivation model bmm and discuss how it may a

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd