User Account

All Pages

Evaluate the two alternatives in terms of effect on price

Assignment Help Accounting Basics
Reference no: EM133128705

Question - Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $12,000 would be spent. Current earnings are $1.60 per share, and the stock currently sells for $50 per share. There are 2,500 shares outstanding- Ignore taxes and other imperfections.

a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share.

b. What will the company's EPS and PE ratio be under the two different scenarios?

Reference no: EM133128705

Questions Cloud

What amount of manufacturing overhead costs will allocated : Comfort Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs
Discuss the multiplier and its effect on the national income : Discuss the multiplier and its effect on the national income if the marginal propensity to consumer (mpc) is 0,6 and the investment by 10 billion..show all calc
Calculate the gross profit and net profit ratio : Consider the below information for a firm: Total sales (Cash + Credit): Rs. 40,000. Calculate the gross profit and net profit ratio
Is knowledge of supply and demand useful : Is knowledge of supply and demand useful? If it is, how does knowing about supply and demand help me? Discuss.
Evaluate the two alternatives in terms of effect on price : Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share
Origins and dynamics of organizational platforms : "Existing conceptualframeworks on GPNs tend to under-theorize the origins and dynamics of these organizational platforms and to overemphasize their governance t
Find the nash equilibrium in prices : Duopolists each have total cost 500Qi, i = 1,2, and produce a differentiated product with demand functions: Q1 = 2000-2P1+ P2 and Q2 = 2000-2P2+P1. (The demand
What depreciation would kimchi record for the year : Kimchi revised the useful life to a total of six years with no residual value. What depreciation would Kimchi record for the year 2020 on this equipment
Comparing the gdp of two countries : Discuss the problems you see in comparing the GDP's of two countries, say, the United States and the People's Republic of China. Please compare properly with re

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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