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Stock repurchase

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Intelligent Industries is offering to repurchase the preferred stock that it issued in 1995. The stock has a dividend of $3.00 a share. The yield has increased as the fortunes of the company have risen. Now in 2006 the yield is 10%. In 1995 it was only 5%. The has offered to recall the stock for $55.00. Would you accept that offer give the stocks current value. Given the stocks original price how much money will you make or loose if you sell?

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Solution Summary

The expert calculates the stock price to evaluate the repurchase offer of the company.

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Intelligent Industries is offering to repurchase the preferred stock that it issued in 1995. The stock has a dividend of $3.00 a share.  The yield has increased as the fortunes of the company have risen.  Now in 2006 the yield is ...

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