What are the benefits of repurchasing shares

Assignment Help Financial Management
Reference no: EM131343695

Share repurchase proposal: Currently, the firm has available capital (cash and net income) of approximately $5,000,000. There is a large block of stock available at $25 a share.

If the firm decides to spend this amount of excess cash on a share repurchase program, how many shares of stock will be outstanding after the stock repurchase is completed?

Shares outstanding is 15,000,000

What are the benefits of repurchasing shares? How will this affect the capital structure of the company? How can this be interpreted in the marketplace?

Would a dividend be better? Please discuss the pros and cons of dividends and share buybacks. Make a recommendation to management.

Concept Check: There are tax ramifications which tend to get very complex; for the sake of this exercise let us disregard tax implications and effects.

Reference no: EM131343695

Discuss whether there is profitable strategy

Utilize the Put/Call Parity principle to analyze the following situation and discuss whether there is a profitable strategy. If there is a profitable strategy, what is it?

What happens when a corporation takes bankruptcy

What happens when a corporation takes bankruptcy? What are your thoughts on corporations that do take bankruptcy. Elaborate and Explain. In the light of recent corporate bankr

Long-term debt ratio-firm have in net fixed assets

Gladstone Pavers has a long-term debt ratio of 0.6 and a current ratio of 1.6. Current liabilities are $700, sales are $4,440, the profit margin is 9.5 percent, and the return

Potential benefits of integrated marketing communication

Define and describe the elements and potential benefits of integrated marketing communication (IMC). As a follow-up to the question above, please define and describe what fact

Assume semi-annual compounding and coupon payments

You can buy or sell a 6% $1000 par U.S. Treasury Note that matures in exactly 4 years (meaning it pays (.06/2)*1000 coupon payments every 6 months starting 6 months from now t

The net outlay required to establish this portfolio

You buy a share of stock, write a 1-year call option with strike price X = $100 and buy a 1-year put option with strike price X = $100. The net outlay required to establish th

Executive compensation or how much hedge fund managers earn

Should we care about executive compensation or how much hedge fund managers earn? How should incentive compensation be changed? Should it be changed? Who can change it?

What is the value of this stock today

The Farmer's Market recently announced that it will pay its first annual dividend two years from today. The first dividend will be $0.50 a share with that amount doubling each

Reviews

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