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

Question

The balance sheet for Ferguson Corp. is shown here in market value terms. There are 7,000 shares of stock outstanding. Instead of a dividend of $1.80 per share, the company has announced a share repurchase of $12,600 worth of stock. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations. 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. Round your final answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Answer:

Nos Number of shares outstanding before repurchase 7000 Less: Number of shares repurchased 223.80 ($12,600/56.3) (Price per share = $394,100/7,000) = $56.3 per share a) Shares outstanding after repurchase 6776.20 b) Price per share after repurchase 56.30 ($394,100 - $12,600)/6776.2

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