Tucker's National Distributing has a current market value of equity of $10,665.Currently,the firm has excess cash of $640,total assets of $22,400,net income of $3,210,and 500 shares of stock outstanding.Tucker's is going to use all of its excess cash to repurchase shares of stock.What will the stock price per share be after the stock repurchase is completed?
A)$20.87
B)$20.94
C)$21.06
D)$21.33
E)$21.42

Question

Quizplus · Accepted Answer

Current price per share = $10,665/500 = $21.33Number of shares repurchased = $640/$21.33 = 30New number of shares outstanding = 500 - 30 = 470New equity = $10,665 - $640 = $10,025New price per share = $10,025/470 = $21.33

Tucker's National Distributing Has a Current Market Value of Equity