86.0k views
3 votes
A company x has 1 million shares outstanding selling at 17 euros/share. it plans to repurchase 97 000 shares at market price. what will be its market capitalization after the repurchase? what will be its stock price?

User Decho
by
7.4k points

1 Answer

6 votes

Final answer:

After repurchasing 97,000 shares, the market capitalization of Company X will be 15,351,000 euros. The stock price will remain at 17 euros per share.

Step-by-step explanation:

The market capitalization of a company can be calculated by multiplying the number of shares outstanding by the current stock price. In this case, Company X has 1 million shares outstanding and a stock price of 17 euros per share.

After repurchasing 97,000 shares, the number of shares outstanding will be reduced to 903,000 (1 million - 97,000).

To calculate the new market capitalization, we multiply the number of shares outstanding (903,000) by the stock price (17 euros).

Market Capitalization after Repurchase: 903,000 shares * 17 euros/share = 15,351,000 euros

The stock price remains the same after the repurchase. So, the stock price will still be 17 euros/share.

User Fannik
by
7.6k points