Stock Repurchase
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Company x has net income of $2,000,000 and it has $1,000,000 share of common stock outstanding. the company's stock currently trades at $32 per share. Company x is considering a plan, in which it will use available cash to repurchase 40% of its shares in the open market. the repurchase is expected to have no effect on the net income or the company's P/E ratio. what would be company x's stock price following the stock repurchase?
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Solution Summary
This solution explains how to calculate a company's stock price after a share repurchase program.
Solution Preview
If there is $1,000,000 of stock at $32/share, you can divide this to find the number of shares:
$1,000,000 / $32/share = ...
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