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 10,000 shares of stock outstanding. Instead of a dividend of $1.90 per share, the company has announced a share repurchase of $19,000 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

Number of shares remaining after repurchase

1First calculat the current shares price

= Equity/Shares outstnading

=485000/10000

=48.5

Shares to be bought back

= 19000/48.5

=391.75

391 shares

If the equity remains same as 485000

Then the share price would be = 48500/9609 =50.47

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