company has 1 million shares outstanding and earnings of $2 million. The company decides to use $10 million of unused cash to buy back shares on the open market. to buy back shares on the open market. The company's stock is trading at $50 per share. If the firm uses all of the $10 million of idle cash to buy back shares on the open market, the firm's shares trade at $50 per share. to buy back shares at market price, the company's earnings per share will be the highest share of the firm will be closest to :
company has 1 million shares outstanding and earnings of $2 million. The company decides to use $10 million of unused cash to buy back shares on the open market. to buy back shares on the open market. The company's stock is trading at $50 per share. If the firm uses all of the $10 million of idle cash to buy back shares on the open market, the firm's shares trade at $50 per share. to buy back shares at market price, the company's earnings per share will be the highest share of the firm will be closest to :
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 12P
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Question
A company has 1 million shares outstanding and earnings of $2 million.
The company decides to use $10 million of unused cash to buy back shares on the open market.
to buy back shares on the open market.
The company's stock is trading at $50 per share.
If the firm uses all of the $10 million of idle cash to buy back shares on the open market, the firm's shares trade at $50 per share.
to buy back shares at market price, the company's earnings per share will be the highest
share of the firm will be closest to :
B. $2.30.
C. $2.50.
A. $2.00.
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