The balance sheet for Chevelle Corp. is shown here in market value terms. There

Question

The balance sheet for Chevelle Corp. is shown here in market value terms. There are 6,000 shares of stock outstanding. Instead of a dividend of $1.50 per share. the company has announced a share repurchase of $9,000 worth of stock. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations and round your final answer to 2 decimal places, (e.g., 32.16)) Shares outstanding What will the price per share be after the repurchase? (Do not round intermediate calculations and round your final answer to 2 decimal places, (e.g., 32.16)) New stock price

Explanation / Answer

1. Current Stock price = 505,200 / 6,000 = $84.2 per share
Number of shares repurchase = 9,000 / 84.2 = 106.88 or 107 shares
Shares outstanding after the repurchase = 6,000 - 107 = 5,893 shares

2. New Stock price after the repurchase = (505,200 - 9,000)/5,893 = $84.20 (will remain same since the re-purchase is done at market price only).

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.