Value of firm's operations; how many shares remain
A firm has 10 million shares outstanding with a market price of $20 per share. The firm has $25 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations, and how many shares will remain after the repurchase?
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Solution Preview
Current value of a firm is the asset shown at its present worth. The current value of this firm is:
10 million shares X $20 per share = $200 ...
Solution Summary
The value of firm's operations for how many shares remained is examined.
$2.19