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What will the new price of the securities be

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The Belton Corporation has $7 million in earnings after taxes and 2 million shares outstanding. The stock trades at a P/E of 20. The firm has $4 million in excess cash.

Problem 1: What will the new EPS be? (Round intermediate calculations and final answer to 2 decimal places.)

Problem 2: If the P/E remains constant, what will the new price of the securities be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Problem 3: By how much, in terms of dollars, did the repurchase change the share price?

Problem 4: Has the shareholder's total wealth changed as a result of the stock repurchase as opposed to the cash dividend?

Reference no: EM132784701

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