A firm has $200 million of assets that includes $50 million of cash and 8 million shares outstanding.If the firm uses $20 million of its cash to repurchase shares,what is the new price per share?

Question

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The new price per share is $25. The firm has $200 million of assets, including $50 million of cash and 8 million shares outstanding. If the firm uses $20 million of its cash to repurchase shares, it will have $30 million of cash and 8 million shares outstanding. The new price per share is $30 million / 8 million shares = $25.

A Firm Has $200 Million of Assets That Includes $50