The Morrison Company has $1.5 million in excess cash it wishes to distribute to shareholders.
Selected financial information is as follows:
If Morrison chooses to distribute the cash through a stock repurchase and the price-earnings ratio doesn't change through the transaction, what will be the market price of the stock after the shares are acquired?

Question

The Morrison Company has $1.5 million in excess cash it wishes to distribute to shareholders. 
Selected financial information is as follows: 
  If Morrison chooses to distribute the cash through a stock repurchase and the price-earnings ratio doesn't change through the transaction, what will be the market price of the stock after the shares are acquired?

Quizplus · Accepted Answer

The Answer of The Morrison Company has $1.5 million in excess cash it wishes to distribute to shareholders. 
Selected financial information is as follows: 
  If Morrison chooses to distribute the cash through a stock repurchase and the price-earnings ratio doesn't change through the transaction, what will be the market price of the stock after the shares are acquired?

The Morrison Company Has $1