What is IWTs intrinsic value of equity

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Problem - Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid shortterm investments. IWT's value of operations is estimated to be about $1,937.5 million; it has $387.5 million in debt and zero preferred stock. As mentioned previously, IWT has 100 million shares of stock outstanding.

(1) Assume that IWT has not yet made the distribution. What is IWT's intrinsic value of equity? What is its intrinsic stock price per share?

(2) Now suppose that IWT has just made the $50 million distribution in the form of dividends. What is IWT's intrinsic value of equity? What is its intrinsic stock price per share?

(3) Suppose instead that IWT has just made the $50 million distribution in the form of a stock repurchase. Now what is IWT's intrinsic value of equity? How many shares did IWT repurchase? How many shares remained outstanding after the repurchase? What is its intrinsic stock price per share after the repurchase?

Reference no: EM132899274

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