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 5,000 shares of stock outstanding.

Instead of a dividend of $1.60 per share, the company has announced a share repurchase of $8,000 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))

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))

The balance sheet for Chevelle Corp. is shown here in market value terms. There are 5,000 shares of stock outstanding.

Explanation / Answer

Part (a) No. of shares outstanding after the repurchase

Share repurchase is an activity carried on by the company in order to purchase or buy back its own shares outstanding in the market at current market determined price.

Current Market Price per outstanding share= Market Value of the company

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