STOCK REPURCHASES Gamma Industries has net income of $3,800,000, and it has 1,490,000 shares of common stock outstanding. The company's stock currently trades a t $67 a share. Gamma is considering a plan in which it will use available cash to repurchase 10% of its shares in the open market at the current $67 stock price. The repurchase is expected to have no effect on net income or the company's P/E ratio. What will be its stock price following the stock repurchase?

BuyFind

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781337395250
BuyFind

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781337395250

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Chapter
Section
Chapter 15, Problem 3P
Textbook Problem

STOCK REPURCHASES Gamma Industries has net income of $3,800,000, and it has 1,490,000 shares of common stock outstanding. The company's stock currently trades a t $67 a share. Gamma is considering a plan in which it will use available cash to repurchase 10% of its shares in the open market at the current $67 stock price. The repurchase is expected to have no effect on net income or the company's P/E ratio. What will be its stock price following the stock repurchase?

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Chapter 15 Solutions

Fundamentals of Financial Management (MindTap Course List)
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