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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The Down Towner has a market value balance sheet as shown below. The firm currently has 12,000 shares of stock
outstanding and net income of $17,500.
Market Value Balance Sheet
$ 14,300
Debt
$ 77,960
Excess cash
Other assets
215,460
Equity
151,800
Total
$229,760
Total
$229,760
The firm has decided to repurchase 10 percent of its outstanding stock at the current market price and fund that
purchase with new debt. After the repurchase there will be
shares outstanding at a price per share of
Multiple Choice
10,200; $11.50
10,200; $12.65
10,800; $12.65
10,800; $11.50
10,800, $14.05
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Transcribed Image Text:Saved
The Down Towner has a market value balance sheet as shown below. The firm currently has 12,000 shares of stock
outstanding and net income of $17,500.
Market Value Balance Sheet
$ 14,300
Debt
$ 77,960
Excess cash
Other assets
215,460
Equity
151,800
Total
$229,760
Total
$229,760
The firm has decided to repurchase 10 percent of its outstanding stock at the current market price and fund that
purchase with new debt. After the repurchase there will be
shares outstanding at a price per share of
Multiple Choice
10,200; $11.50
10,200; $12.65
10,800; $12.65
10,800; $11.50
10,800, $14.05
< Prev
11 of 20
Next>
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