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 5,000 shares of stock outstanding.

Instead of a dividend of $1.30 per share, the company has announced a share repurchase of $6,500 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.)

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

Explanation / Answer

Current share price:

= $434,500÷5,000

= $86.90

Shares outstanding after repurchase:

= ($434,500-$6,500)÷$86.90

= 4,925.20 shares

Price per share after repurchase:

= ($434,500-$6,500)÷ 4,925.20 shares

= $86.90

(Assumed repurchased shares are retired)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

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