Question

Instead of a dividend of $1.60 per share, the company has announced a share repurchase of $16,000 worth of stock. How many shares will be outstanding after the repurchase?

Answer 1

9,690 stocks

Step-by-step explanation:

some information is missing:

Market Value Balance Sheet

Cash $45,300 Equity $515,300

Fixed assets $470,000

Total $515,300 Total $515,300

total number of shares outstanding = 10,000

stock's market price = $515,300 / 10,000 = $51.53

stocks repurchased = $16,000 / $51.53 = 310.50, but we must round down to 310 stocks

stocks outstanding after repurchase = 10,000 - 310 = 9,690