Stock price and tax advantage

Assignment Help Accounting Basics
Reference no: EM13115850

The Carlton 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 3million is to repurchase shares in the market at a price of$83 per share, how many shares will be acquired? Round to the nearest share. 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? D. What will the new earning per share be? Round to two place to the right of the decimal.

B. Has the stockholder's total wealth changed as a result of the stock repurchase as opposed to receiving the cash dividends? G. What tax advantages might there be for a stock repurchase as compared to a cash dividend? H What are some other reason a corporation may wish to repurchase own shares in the market?

Reference no: EM13115850

Statement of partnership-realization and liquidation

The partners share profits and losses in the ratio of 3:4:3. Partner B is personally insolvent, but partners A and C have sufficient personal assets to satisfy any capital d

What is the cost of the land

Burleson, Inc. purchased a tract of land, a small office building, and some equipment for $1,500,000. The appraised value of the land was $850,000, the building $675,000, an

American opportunity tax credit

Janie graduates from high school in 2012 and enrolls in college in the fall. her parents pay $4,000 for her tutiion and fees and assuming janie's parents have agi of 170,000,

Concepts are important to financial statements

Search the course background information, the Internet and/or the Cyber Library. Discuss the terms listed below. Your discussion should expand on the definition as given in

Re-capture of the general business investment

Durrabusiness is organized as a regular C corporation in 1986. At the beginning of the present year, Durrabusiness elects to be an S corporation. Will the election cause a r

Audit clients in recent years

List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item, indicate the specific threats, if any, that the

Compute the expected cost per hour of the current system

On average, 90 patrons arrive per hour at a hotel lobby (interarrival times are exponential) waiting to check in. At present there are five clerks, and patrons wait in a sin

Create excel worksheet to calculate gpa

Design and construct an Excel worksheet that can be used to calculate your GPA. Make sure you use formulas to total and calculate your grades for past courses as well as fut


Write a Review

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd