Nik Syak Dental Berhad has net income of RM3,000,000 and it has 2,000,000 outstanding common shares. The company's share currently trades at RM45 a share. Nik Syak is considering a plan where it will use available cash to repurchase 30 percent of its shares in the open market. The repurchase is expected to have no effect on either net income or the company's P/E ratio. Calculate the firm's new share price.
Nik Syak Dental Berhad has net income of RM3,000,000 and it has 2,000,000 outstanding common shares. The company's share currently trades at RM45 a share. Nik Syak is considering a plan where it will use available cash to repurchase 30 percent of its shares in the open market. The repurchase is expected to have no effect on either net income or the company's P/E ratio. Calculate the firm's new share price.
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 5P
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Nik Syak Dental Berhad has net income of RM3,000,000 and it has 2,000,000
outstanding common shares. The company's share currently trades at RM45 a
share. Nik Syak is considering a plan where it will use available cash to
repurchase 30 percent of its shares in the open market. The repurchase is
expected to have no effect on either net income or the company's P/E ratio.
Calculate the firm's new share price.
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