Buy back refers to the repurchase of own stock by the company generally at the p
ID: 373251 • Letter: B
Question
Buy back refers to the repurchase of own stock by the company generally at the prevailing market price.There are number of reasons based on the situation and market conditions for which buyback will be benefical to the company.Some of the reasons include boosting financial ratios,undervaluation and ownership.
In the present case Share price in different scenario is $5,$30 and $18 per share.Hence the expected price is ($5+$30+$18)/3 = $17.67. The price of share in the market is $15.Hence the price is under valued.The buyback will reduce the number of shares outstanding in the market and this will rises the share price.Hence the stock should be bought Back.
Explanation / Answer
Given the following information, would you accept the project if your MARR is 15%? Explain why or why not 7. Worst Case Scenario Most Likely Scenario Best Case Scenario -$53,000 -32% $1,000 15% $125,000 67% PW IRR
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