The balance sheet for Ferguson Corp. is shown here in market value terms. There

Question

The balance sheet for Ferguson Corp. is shown here in market value terms. There are 7,000 shares of stock outstanding. Instead of a dividend of $1.80 per share, the company has announced a share repurchase of $12,600 worth of stock. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 32.16.) What will the price per share be after the repurchase? (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

current shares(n0)=7000

Current equity(E0)=394100

Dividend=1.80

Share repuchase of $ worth stocks=12600

Price per share(po)=E0/n0=394100/7000=56.3

NO.of shares repurchased =12600/P0=223.801

Outstanding shares=7000-223.801=6776.1989 0r 6776.21

Price per shares after repurchase=(7000*56.3-7000*1.80)/6776.21

                                                     =(394100-12600)/6776.21=56.29

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