Shares repurchase Introduction: Shares repurchase is where the company itself buys its own shares back.

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Answer 1

Question

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

c)

Summary Introduction

To determine: Market price

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Summary Introduction

To discuss: The tax implications.

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The following financial data on the Bond Axiata Berhad are available:Earnings available for common stockholders RM1,600,000 Number of shares of common stock outstanding 800,000 Market Price per share RM40.00 The firm is currently considering whether it should use RM800,000 of its earnings to pay cash dividends of RM1 per share or to repurchase stock at RM42 per share.(a) Estimate the Earnings per share before repurchase (EPS)(b) Find the Price/earnings (P/E) ratio(c) Determine how many shares of stock can the firm repurchase at the RM42-per share price, using the funds that would have gone to pay the cash dividend. (d) Calculate the EPS after the repurchase. Explain your calculations.(e) If the stock still sells at 10 times earnings, what will the market price be after the Repurchase. (f) Examine the pre and post-repurchase earnings per share for the Bond Axiata Berhad(g) Compare and contrast the stockholders’ positions under the dividend and repurchase alternatives. Discuss the tax…

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Answer 2

Question

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

c)

Summary Introduction

To determine: Market price

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Summary Introduction

To discuss: The tax implications.

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Answer 3

Question

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

c)

Summary Introduction

To determine: Market price

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Summary Introduction

To discuss: The tax implications.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

c)

Summary Introduction

To determine: Market price

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Summary Introduction

To discuss: The tax implications.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

c)

Summary Introduction

To determine: Market price

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Summary Introduction

To discuss: The tax implications.

Answer 6

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

Answer 7

Chapter 14, Problem 14.17P

a)

Summary Introduction

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

Answer 8

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

Answer 9

b)

Summary Introduction

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

Answer 10

c)

Summary Introduction

To determine: Market price

Answer 11

c)

Summary Introduction

To determine: Market price

Answer 12

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

Answer 13

Summary Introduction

To discuss: The pre and post repurchase earnings per share.

Answer 14

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Answer 15

e)

Summary Introduction

To discuss: the stockholders position under the dividend and repurchase alternatives.

Answer 16

Summary Introduction

To discuss: The tax implications.

Answer 17

Summary Introduction

To discuss: The tax implications.

Answer 18

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Answer 19

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Answer 20

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Answer 21

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Shares repurchase Introduction: Shares repurchase is where the company itself buys its own shares back.

Solution Summary: The author explains that shares repurchase is where the company itself buys its own shares back.

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

To determine: Market price

To discuss: The pre and post repurchase earnings per share.

To discuss: the stockholders position under the dividend and repurchase alternatives.

To discuss: The tax implications.

Want to see the full answer?

Chapter 14 Solutions

Shares repurchase Introduction: Shares repurchase is where the company itself buys its own shares back.

Solution Summary: The author explains that shares repurchase is where the company itself buys its own shares back.

To determine: Shares repurchase Introduction: Shares repurchase is where the company itself buys its own shares back.

To determine: The earnings per share Introduction: Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.

To determine: Market price

To discuss: The pre and post repurchase earnings per share.

To discuss: the stockholders position under the dividend and repurchase alternatives.

To discuss: The tax implications.

Want to see the full answer?

Chapter 14 Solutions

To determine: Shares repurchase

Introduction:

Shares repurchase is where the company itself buys its own shares back.

To determine: The earnings per share

Introduction:

Earnings per share refer to the earnings per share of outstanding shares of company’s common stock.