Xyz corporation-managerial finance

Assignment Help Finance Basics

Reference no: EM1337604

XYZ Corporation has $4 million in earnings after taxes and 1 million shares outstanding. The stock trades at a P/E ratio of 20. The firm has $3 million in excess cash.

a. Compute the current price of the stock.

b. If the $3 million is used to pay dividends, how much will dividends per share be?

c. If the $3 million is used to repurchase shares in the market at a price of $83 per share, how many shares will be acquired? (Round to the nearest share.)

d. What will the new earnings per share be? (Round to two places to the right of the decimal.)

e. If the P/E ratio remains constant, what will the price of the securities be? By how much, in terms of dollars, did the repurchase increase the stock price?

Reference no: EM1337604

Questions Cloud

Question on stock repurchase : Beta Industries has a net income of $2,000,000 and it has $1,000,000 shares of common stock outstanding. The company's stock currently trades @$32 a share.

Build shareholder value through diversification strategies : Build shareholder value through related or unrelated diversification strategies.

Boundary conditions scope-time and cost : Why is it important to understand the boundary conditions "scope, time, and cost"of any information systems project.

Expalin how many firms are in this industry : What is the equilibrium price of a box. Is this the long-run equilibrium price. Expalin how many firms are in this industry when it is in long-run equilibrium.

Xyz corporation-managerial finance : XYZ Corporation has $4 million in earnings after taxes and 1 million shares outstanding. Compute the current price of the stock. What will the new earnings per share be? (Round to two places to the right of the decimal.)

Is filename generation happen on variable assignment : Will the following command always rightly loop through each of the positional parameters?

Tenant making an improvements to leased premises : If a tenant makes improvements to leased premises:Those improvements are the property of the tenant and can be depreciated by the tenant.

Discuss the strategic plan : Discuss the strategic plan

Which is true of today''s cios : The traditional set of IS responsibilities includes all of the following except.

User Account

All Pages