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AMC Corporation currently has an enterprise value of $350 million and $110 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $550 million of $150 million.
a) What is AMC's share price prior to the share repurchase?b) What is AMC's share price after the repurchass if its enterprise value goes up? What is AMC's share price after the repurchase if its enterprise value declines?c) Suppose AMC waits until after the news comes out to do the share repurchase. What is AMC's share price after the repurchass if its enterprise value goes up? What is AMC's share price after the repurchase if its enterprise value declines?d) Suppose AMC management expects good news to come out. Based on your answers to parts (b) and (c), if management desires to maximize AMC's ultimate share price, will they undertake the repurchase before or after the news comes out? When would management undertake the repurchase if they expect bad news to come out?e) Given your answer to part d, what effect would you expect an announcement of a share repurchase to have on the stock price? Why?
Pretend that you are planning purchasing a car that costs $25,699. The car gets 23 miles per gallon in the city, and thirty miles per gallon on the highway.
a loan officer of the First National Bank. The owner of a small business has come into the bank today and is requesting an immediate $100,000 loan for which she has appropriate collateral. You also know the bank is going to reduce its lending interes..
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Johnson Catering Corporation will pay a $2.65 per share dividend next year. The firm pledges to rise its dividend by 4.75% per year, indefinitely.
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Delta , LLC, currently net leases its headquarters office building for $70,000 each month, and this lease has two years left to run. Under a commercial fully net lease, the tenant pays for all repairs, maintenance, insurance and property taxes.
Need help with the following. Can you please show me how to answer the questions at the end of this reading for future value and present value. How much will tuition and living expenses be per year when Brady is ready to attend? Give an answer for ea..
Grossman Enterprises has an equity multiplier of 2.31 times, total assets of $2,014,436, an ROE of 16.50 percent, and a total assets turnover of 2.41 times. Calculate the firm's sales and ROA.
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