What are the benefits of repurchasing shares

Assignment Help Financial Management

Reference no: EM131343695

Share repurchase proposal: Currently, the firm has available capital (cash and net income) of approximately $5,000,000. There is a large block of stock available at $25 a share.

If the firm decides to spend this amount of excess cash on a share repurchase program, how many shares of stock will be outstanding after the stock repurchase is completed?

Shares outstanding is 15,000,000

What are the benefits of repurchasing shares? How will this affect the capital structure of the company? How can this be interpreted in the marketplace?

Would a dividend be better? Please discuss the pros and cons of dividends and share buybacks. Make a recommendation to management.

Concept Check: There are tax ramifications which tend to get very complex; for the sake of this exercise let us disregard tax implications and effects.

Reference no: EM131343695

Questions Cloud

Calculate the freezing point of sea water : For this question imagine that sea water is a 3.5 mass % solution of NaCl with a density of 1.00g/mL. Assume full dissociation of the NaCl. a) Calculate the freezing point of sea water. Briefly explain why it is not 0 (degrees Celsius).

Collect some of the current accounts receivable : General hospital has a current ratio of 0.5. Which of the following actions would improve (increase) this ratio? Use cash to pay off current liabilities. Collect some of the current accounts receivable. Use cash to pay off some long term debt.

Present value of an investment future cash flows : The difference between the present value of an investment’s future cash flows and its initial cost is the: What is the net present value of a project with an initial cost of $36,900 and cash inflows of $13,400, $21,600, and $10,000 for Years 1 to 3, ..

Moles and the mass of magnesium carbonate : The number of moles and the mass of magnesium carbonate, MgCO3, required to produce 283 g of carbon dioxide. (MgO is the other product.)

What are the benefits of repurchasing shares : Share repurchase proposal: Currently, the firm has available capital (cash and net income) of approximately $5,000,000. There is a large block of stock available at $25 a share. What are the benefits of repurchasing shares? How will this affect the c..

Characteristic features of the graph : Sketch the shape of the pH curve you would obtain for this titration, and label all characteristic features of the graph.

Explain the difference between real gdp and nominal gdp : Define the GDP and explain how GDP is different from the Gross National Product (GNP). Explain the difference between Real GDP and Nominal GDP.

Aqueous solution of lactic acid : Lactic acid (C3H603), which occurs in sour milk, sauerkraut and sore muscles, is weak monoprotic acid (Ka 0.00014). a) Calculate the pH of a 0.125M aqueous solution of lactic acid.

What is a swot analysis : This assignment is all about you. Be as honest as you can in your assessment so you can use this information to make the most of your education as you move forward in this class and through your future learning experiences. What is a SWOT analysis

User Account

All Pages