Answer:

Shares outstanding = 1,200,000

EPS = $ 1.25
Stock Price = $ 25
Total Market Value = $ 30,000,000
Shares owned = 120
Ownership Value = $ 3000
Ownership Stake = 0.01
Answer:

Shares outstanding = 1,500,000

Stock Price = $ 20
EPS = $ 1
Dividends per share = $ 0.4
Dividend yield = 2%
P/E = 20
Total Market Value = $ 30 m
Answer:

EPS = Earnings/ Number of shares outstanding = $ 5

EPS after buy-back = Earnings after buy-back/ Number of shares outstanding

after buy-back

Original earnings = 5*20 = $ 100 m

Interest on buy-back = 30*0.08 = $ 2.4 m

Earnings after buy-back = 100 – 2.4 = $ 97.6 m

EPS after buy-back = 97.6/ (20 – 0.6) = 97.6/ 19.4 = $ 5.03

Answer:

EPS = Earnings/ Share Price = $ 5

EPS after buy-back = Earnings after buy-back/ Number of shares outstanding

after buy-back

Original earnings = 5*20 = $ 100 m

Interest on buy-back = 30*0.15 = $ 4.5 m

Earnings after buy-back = 100 – 4.5 = $ 95.5 m

EPS after buy-back = 95.5/ (20 – 0.6) = 95.5/ 19.4 = $ 4.92

Answer:

Blue Inc:

Original BVPS = 300/ 20 = $ 15

BVPS after share repurchase = New Total BV/ Remaining shares

Shares being brought back = 10 m/ 25 = 400000

Number of remaining shares = 19.6 m

New Total BV = 300 – 10 = $ 290 m

New BVPS = 290/ 19.6 = $ 14.8

Red Company:

Original BVPS = 700/ 20 = $ 35

BVPS after share repurchase = New Total BV/ Remaining shares

Shares being brought back = 10 m/ 25 = 400000

Number of remaining shares = 19.6 m

New Total BV = 700 – 10 = $ 690 m

New BVPS = 690/ 19.6 = $ 35.20

Impact of Cash Dividend and Share Repurchase of equal amount

Answer:

Impact of Dividend Payment:

Total Market Value (Initial) = 20 * 50 = $ 1000 m

New Market Value = 1000 – 30 = $ 970 m
Total shares outstanding = 20 m
New Share Price = 970/ 20 = $ 48.5

Impact of Share Repurchase:

Total Market Value (Initial) = 20 * 50 = $ 1000 m

New Market Value = 1000 – 30 = $ 970 m
Total shares outstanding = 20 – 30/50 = 19.4 m
New Share Price = 970/ 19.4 = $ 50

Question
Initial earnings = 36*0.6 = $ 21.6 m
Earnings after share repurchase = 21.6 – 45*0.12*0.6 = $ 18.36 m
Number of shares outstanding = 36 – 3.6 = 32.4
EPS after share repurchase = 18.36/ 32.4 = $ 0.57

Question

Answer:

Initial BVPS = $ 5
Initial Total BV = 40*5 = $ 200 m
New Total BV = 200 – 15 = $ 185 m
New Number of shares outstanding = 40 – 15/60 = 39.75 m
New BVPS = 185/ 39.75 = $ 4.65