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    Shares Purchase

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    The equity of Enterprise Holds Inc. has a market value of $3 million. It currently has 300,000 shares outstanding, and a book value of equity of $1,095,000. An unexpected cash windfall has prompted management to consider either a special dividend of $6.00 per share or a stock repurchase for cash.
    If management estimates that a stock repurchase announcement will increase stock price by 5 percent, how many shares should they be prepared to repurchase?

    © BrainMass Inc. brainmass.com October 1, 2020, 8:30 pm ad1c9bdddf
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/shares-purchase-143212

    Solution Preview

    Total Market Capitalization = $3,000,000
    Total Shares Outstanding = 300,000
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    The solution answers the question below in great detail.

    $2.19

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