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$2.00 Exprected Market Price / Stock Repurchase

• From Business: Finance , Economics: General-Economics
• Closed, but you can still post tutorials
• Due on Jan. 10, 2008
• Asked on Jan 03, 2008 at 3:01:49PM

Q:

A firm estimates that its current stock price of $ 35 is undervalued by the market. A repurchase plan is devised to buy back 100,000 of its outstanding 1,000,000 shares at the expected equilibrium price following the repurchase. If current earnings are $ 1,500,000 , and the firm’s assumptions are correct, then the expected market price following the purchase is ?

 

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