Question

Bo's Home Manufacturing has 410,000 shares outstanding that sell for $46.86 per share. The company has announced that it will repurchase $61,000 of its stock. What will the share price be after the repurchase?

Answer 1

The correct answer is $46.86.

Step-by-step explanation:

According to the scenario, the computation of the given data area as follows:

Shares outstanding = 410,000

Value per share = $46.86

So, total value of outstanding shares = 410,000 × $46.86 = $19,212,600

Repurchase share value = $61,000

So, Number of shares repurchased = $61,000 ÷ $46.86 = 1301.7 shares

So, outstanding shares = 410,000 - 1301.7 = 408,698.3 shares

So, Share price after repurchase = ($19,212,600 - $61,000) ÷ 408,698.3 shares

= $46.86