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g100num [7]
3 years ago
14

A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,000 and other assets of $5,000. Equ

ity is worth $6,000. The firm has 600 shares of stock outstanding and net income of $700. The firm has decided to spend all of its excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed? Group of answer choices
Business
1 answer:
Jet001 [13]3 years ago
6 0

Answer:

500

Explanation:

The computation of Total outstanding shares is shown below:-

Market Value of Shares before Share repurchase = Equity ÷ Number of Shares outstanding

= $6,000 ÷ 600

= $10

Shares repurchased = Excess Cash ÷ Price of a Share

= $1,000 ÷ 10

= 100

Total Outstanding Shares = Number of Shares outstanding  - Shares repurchased

= 600 - 100

= 500

We applied the above formula.

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2 years ago
Lindsay needs to purchase a car. The car she is planning o in purchasing costs $8,000
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1. $6,000

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Explanation:

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As Lindsay would pay for a term of 3 years

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3 years ago
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