“A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm?
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a) “A stock repurchase carries information content”. What type of
information has been referred to in this statement? What impact is
likely to have on the stock price of a firm?
b) The Olive Vase has 56,000 shares of stock outstanding with a par value
of $1 per share and a market value of $11 a share. The company just
announced a 3-for-4 reverse stock split. Currently, you own 500 shares
of this stock. What is the total value of your stock? What will the
total value of your shares be after the reverse stock split?
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- a) “A stock repurchase carries information content”. What type ofinformation has been referred to in this statement? What impact islikely to have on the stock price of a firm? (Max 50 words)b) The Olive Vase has 56,000 shares of stock outstanding with a par valueof $1 per share and a market value of $11 a share. The company justannounced a 3-for-4 reverse stock split. Currently, you own 500 sharesof this stock. What is the total value of your stock? What will thetotal value of your shares be after the reverse stock split?BOTH QUESTIONS a) “A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm? (Max 50 w ords) b) The Olive Vase has 56,000 shares of stock outstanding with a par value of $1 per share and a market value of $11 a share. The company just announced a 3-for-4 reverse stock split. Currently, you own 500 shares of this stock. What is the total value of your stock? What will the total value of your shares be after the reverse stock split?All computations and Formula must be done and shown in detail A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm? (Max 50 words) The Olive Vase has 56,000 shares of stock outstanding with a par value of $1 per share and a market value of $11 a share. The company just announced a 3-for-4 reverse stock split. Currently, you own 500 shares of this stock. What is the total value of your stock? What will the total value of your shares be after the reverse stock split?
- c) Tucker’s National Distributing has a current market value of equity of $10,665. Currently, the firm has excess cash of $640, total assets of $22,400, net income of $3,210, and 500 shares of stock outstanding. Tucker’s is going to use all of its excess cash to repurchase sharesof stock. What will the stock price per share be after the stockrepurchase is completed?I answred question 1 below butneed help with question 2. I've included my answer to question 1 since it is needed to do question 2. 1. We calculated the market value of equity on Sangria's balance sheet by multiplying its current stock price ($7.50) by 100 million, the number of its outstanding shares. The company's future prospects are good, so the stock is trading above book value ($7.50 vs. $5.00 per share). However, interest rates have been stable since the firm's debt was issued and the book and market values of debt are in this case equal. Sangria's cost of debt (the market interest rate on its existing debt and on any new borrowing) is 6%. Its cost of equity (the expected rate of return demanded by investors in Sangria's stock) is 12.4%. The market-value balance sheet shows assets worth $1,250 million. Of course we can't observe this value directly, because the assets themselves are not traded. But we know what they are worth to debt and equity investors ($500 + 750 = $1,250…Question 5 a) “A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm? b) The Olive Vase has 56,000 shares of stock outstanding with a par value of $1 per share and a market value of $11 a share. The company just announced a 3-for-4 reverse stock split. Currently, you own 500 shares of this stock. What is the total value of your stock? What will the total value of your shares be after the reverse stock split?
- For the following stock investment, find (a) the total purchase price, (b) the total dividend amount, (c) the capital gain or loss, (d) the total return, and (e) the percentage return. Ignore broker and SEC fees. (a) What is the total purchase price? $ (Simplify your answer.) ... Number of shares Purchase price per share Dividend per share Sale price per share 140 $17.50 $1.97 $13.651. 2. 3. On February 1, you bought 100 shares of stock in the Francesca Corporation for $34 a share and a year later you sold it for $39 a share. During the year, you received a cash dividend of $1.50 a share. Compute your HPR and HPY on this Francesca stock investment. Firms raise capital from investors by issuing shares in the primary markets. Does this imply corporate financial managers can ignore trading of previously issued shares in the secondary market? 7. A stockbroker calls you and suggests that you invest in the Lauren Computer Company. After analyzing the firm's annual report and other material, you believe that the distribu- tion of expected rates of return is as follows: LAUREN COMPUTER CO. Possible Rate of Return -0.60 -0.30 -0.10 0.20 0.40 0.80 Probability 0.05 0.20 0.10 0.30 0.20 0.15 Compute the expected return [E(R;)] on Lauren Computer stock.! Required information [The following information applies to the questions displayed below.] Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Required: 1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.) X Answer is complete but not entirely correct. After 100% Stock Dividend $ 2,200 53,000 55,200 55,200 X 110,400 Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Shares outstanding Par value per share Share price Before $ 1,000 55,000 56,000 23,450 $ 79,450 1,000 $ 1.00 $ 122 $ $ 2,200 x After 2- for-1 Stock Split $ 1,100 x 53,000 54,100 55,200 $…
- Presently, your company’s Face Value of Equity Share RO 10 and Market Value of your Share in MSM is RO 25 per share. In order to increase the trading volume and market liquidity of your company stock, will you suggest the management to go for stock split? Explain your management about concept of stock slip with the advantage of splitting the stock of your company with the current scenario.What effect will a two-for-one stock split have on the following items found on a firm's financial statements? a. Earnings per share $5.00. Round your answer to the nearest cent. Initial amount $5.00 $ b. Total equity $10,000,000. Round your answer to the nearest dollar. Initial amount $ New amount Initial amount $4,000,000 New amount $10,000,000 c. Long-term debt $4,600,000. Round your answer to the nearest dollar. Effect $ New amount Effect Initial amount $4,600,000 $ d. Additional paid-in capital $1,689,000. Round your answer to the nearest dollar. Effect New amount $ New amount -Select- Effect New amount Initial amount $1,689,000 e. Number of shares outstanding 800,000. Round your answer to the nearest whole number. Initial amount 800,000 f. Earnings $4,000,000. Round your answer to the nearest dollar. Effect -Select- -Select- -Select- Effect -Select- -Select-Your company is finally ready to sell its shares to the public. The manager of your company decided to sell 20% of total shares to an investment bank. In which market this transaction will take place? Select one: a.Secondary market b.Bonds market c.Primary market d.Stock exchange market e.None of the above
