A firm has $400 million of assets that includes $50 million of cash and 10 million shares outstanding. If the firm uses $40 million of its cash to repurchase shares, what is the new price per share?

Question

Quizplus · Accepted Answer

After the repurchase, the firm has $360 million in assets and 9 million shares outstanding, so the new price per share is $360 million / 9 million shares = $40.

A Firm Has $400 Million of Assets That Includes $50