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    Stock Repurchase Shares & Value of Operations

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    A firm has 10 million shares outstanding, with a $20 per share market price. The firm has $25 million in extra cash that it plans to use in a stock repurchase; the firm has no other financial investments.

    What is the firm's value of operations, and how many shares will remain after the repurchase?

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    Solution Preview

    The current value of the firm is 10 million shares X $20 per share = $200 million.
    After the repurchase, firm ...

    Solution Summary

    The solution explains how to calculate the number of shares to repurchase and the value of operations after repurchase.