Purchase Solution

Shares Purchase

Not what you're looking for?

Ask Custom Question

The equity of Enterprise Holds Inc. has a market value of $3 million. It currently has 300,000 shares outstanding, and a book value of equity of $1,095,000. An unexpected cash windfall has prompted management to consider either a special dividend of $6.00 per share or a stock repurchase for cash.
If management estimates that a stock repurchase announcement will increase stock price by 5 percent, how many shares should they be prepared to repurchase?

Purchase this Solution
Solution Summary

The solution answers the question below in great detail.

Solution Preview

Total Market Capitalization = $3,000,000
Total Shares Outstanding = 300,000
Share ...

Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

View More Free Quizzes
Related BrainMass Solutions

  • Financing Decision

    Therefore, value of the existing shares after the purchase is made= $51 =5100000/100000 If Next needs to finance the purchase of the new plane with equity, will it make sense for them to purchase the plane?

  • Share Repurchase Mechanisms

    Purchase price to be paid by the company is the lowest price tendered by the investors. If the number of shares sought is less than the number of shares tendered, the company will purchase all the shares on pro rata basis.

  • Purchase decision

    I evaluated the alternatives of term deposits, bonds, and shares and decided to invest in shares. Next I selected the shares for purchase and bought them. To my horror, within one week of purchase the value of the shares declined by 6%.

  • Shares and the new purchase price

    271530 Shares and the new purchase price 3) Katie Holmes and Garden Co. has 10,640,000 shares outstanding. The stock is currently selling at $52 per share.

  • Holding Period and Stock Returns

    ) Purchase price for 100 shares= $5,824 = 100 x $58.24 Capital Gains for 100 shares= $462 = 100 x $4.62 Dividends for 100 shares= $245 = 100 x $2.45 Capital Gains Yield

  • Purchasing New Shares and Expected Capital Gain

    Company X is considering issuing 10,500 new shares to help finance the purchase of an additional plant and equipment. If Mr.

  • Fix cash flow statement: Carpino; Harris Co Equity Section

    $600,000 Common stock, authorized 5,000,000 shares, $1 par value, 3,000,000 shares issued, and 2,700,000 outstanding...................................................................

  • Returns on stock and bond investments

    # of shares= 100 Selling price per share= $25.00 Amount realized from sale of shares= $2,500 =100x25 Purchase price per share= $23.00 Purchase amount $2,300 =100x23 Therefore capital gains=

  • Rights issue

    Number of existing shares= 100,000 4a The number of rights required to purchase one share= 10 =100,000/10,000.

  • Sunshine Corporation

    to prepare the journal entry to record the purchase of the treasury shares on February 1, 20xx.

View More Related Solutions