How would decision to use the cash for share repurchase

Assignment Help Financial Management

Reference no: EM132023699

Alsand oil is an all equity firm with 100 million shares outstanding. Alsand has $150million in cash and expects future free cash flow of $65 million per year. Management plans to use the cash to expand the firms operations, which will in turn increase future free cash flow by 12%. If the cost of capital of Alsand investment is 10%, how would a decision to use the cash for a share repurchase rather than the expansion change the share price? Why?

Reference no: EM132023699

Questions Cloud

Appear to use computers or algorithms : What are devices in your home that appear to use computers or algorithms? Can you name at least one device for every room in your house?

Calculate the dividend yield : You purchase one share of stock for $67.30. Calculate the dividend yield.

How can you apply the concepts to your project : Read article #1 below. How can you apply these concepts to your project about reducing layers of bed linens that are placed under patients to prevent skin break

Compute eac for both machines : You are evaluating two different silicon wafer milling machines. compute the EAC for both machines.

How would decision to use the cash for share repurchase : How would a decision to use the cash for a share repurchase rather than the expansion change the share price? Why?

Explain your own strengths and weaknesses as a communicator : Describe your topic ideas for your final project and presentation. Discuss if this is a personal project, a workplace project, or a civic project.

Implement a stack of strings : Implement a Stack of Strings using your favorite programming language ( Preferably using C++ / Java / C# / Python). You should include following functionalities

Steps involved in designing a program : Pseudocode is much more detail-oriented, and it is easier to see the steps involved in designing a program."

Calculate the price of futures contract : Calculate the price of a 45-day futures contract, if you know that 45-day call options on the underlying with strike of $287 trade for c=$25.9.

User Account

All Pages