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    Stock price following the stock repurchase

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    Beta Industries has a net income of $2,000,000 and it has $1,000,000 shares of common stock outstanding. The company's stock currently trades @$32 a share. Beta is considering a plan in which it will use available cash to repurchase 20% of its shares in the open market. The repurchase is expected to have no effect on either net income or the company's P/E ratio. What will be its stock price following the stock repurchase?

    © BrainMass Inc. brainmass.com October 1, 2020, 10:33 pm ad1c9bdddf
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/stock-price-following-the-stock-repurchase-229615

    Solution Preview

    Current EPS = Net Income/Number of shares outstanding = ...

    Solution Summary

    The solution explains the calculation of stock price following the stock repurchase

    $2.19

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