You have decided to retire and want to sell your shares in a closely held,all equity firm.The other shareholders have agreed to have the firm borrow $954,200 to purchase your 6,500 shares of stock at the current market value.The total number of shares outstanding is 30,000.What will be the new price per share after the repurchase?
A)$146.80
B)$131.46
C)$148.07
D)$136.09
E)$141.41

Question

Quizplus · Accepted Answer

Price per share = $954,200/6,500 = $146.80Current firm value = 30,000 × $146.80 = $4,404,000New price per share = ($4,404,000 - 954,200)/(30,000 - 6,500)= $146.80

You Have Decided to Retire and Want to Sell Your