User Account

All Pages

What effect will the repurchase have on an investor

Assignment Help Financial Accounting
Reference no: EM132920325

Question - The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $2 per share, and there are 10,000 shares of stock outstanding. The market-value balance sheet for Payout is shown below.

Assets Liabilities and Equity

Cash $100,000

Equity $1,250,000

Fixed assets 1,150,000

So far, the price of the share today is $125 per share and it will sell at $123 per share for tomorrow. Now suppose that Payout announces its intention to repurchase $10,000 worth of stock instead of paying out the dividend.

a. What effect will the repurchase have on an investor who currently holds 250 shares and sells 4 of those shares back to the company in the repurchase?

b. What effect will the initial cash dividend payment have on the same investor?

Reference no: EM132920325

Questions Cloud

Make a recommendation on purchasing the car : Imagine visiting overseas, where you win the local lottery and can buy any foreign car you wish and will pay full retail price using the local currency, payable
Assess key supplier-management approaches : Assess key supplier-management approaches. What are their strengths and weaknesses? What approach do you think the institution you selected uses?
Calculate the price of a bond : Calculate the price of a bond if the coupon payment is 9.65% yield for the bond is 6.96%, bonds face value is1,000 and matures in 16
How does staff morale affect the culture of a school : How does staff morale affect the culture of a school? How might the principal's actions affect staff morale? How might a principal's personal values and beliefs
What effect will the repurchase have on an investor : What effect will the repurchase have on an investor who currently holds 250 shares and sells 4 of those shares back to the company in the repurchase
Impact in the domestic policy of pakistan : How does religion play a huge impact in the domestic policy of Pakistan and why is it in place. In south Asian there are a lot of religions. Is there benefit of
Explain use of vrio analysis : Using resource based view (RBV), critically discuss how the use of VRIO analysis has enabled H&M in fast fashion to maintain its competitive advantage over othe
Operational control of part 121 operations : Identify at least two responsibilities of a dispatcher relating to operational control of Part 121 operations. How do these duties compare with those of the pil
How much should the lease payments be : If the Hegan Corporation desires a 12 percent return on its investment, how much should the lease payments be

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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