Nik Syak Dental Berhad has net income of RM3,000,000 and it has 2,000,000 outstanding common shares. The company's share currently trades at RM45 a share. Nik Syak is considering a plan where it will use available cash to repurchase 30 percent 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. Calculate the firm's new share price.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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(b)
Nik Syak Dental Berhad has net income of RM3,000,000 and it has 2,000,000
outstanding common shares. The company's share currently trades at RM45 a
share. Nik Syak is considering a plan where it will use available cash to
repurchase 30 percent 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.
Calculate the firm's new share price.
Transcribed Image Text:(b) Nik Syak Dental Berhad has net income of RM3,000,000 and it has 2,000,000 outstanding common shares. The company's share currently trades at RM45 a share. Nik Syak is considering a plan where it will use available cash to repurchase 30 percent 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. Calculate the firm's new share price.
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