shares

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If Julie’s shares are repurchased, the rm’s assets (represent therefore, value declines by: 187, !! shares " #$ per share %,!!!,!!! &he rm’s ne' mar et value is determined as follo's: ar et *alue before +epurchase ($,!%$, !! shares " #$ per +eduction in value occasioned by +epurchase e' ar et *alue umber of shares outstandin- after repurchase . $,!%$, !! $,!%$, !! / 187, !! . 1,87 ,!!!

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salculation

Transcript of shares

Sheet1If Julies shares are repurchased, the firms assets (represented by cash) and, therefore, value declines by:187,500 shares x 32 per share6,000,000The firms new market value is determined as follows:Market Value before Repurchase (2,062,500 shares x 32 per share)66,000,000Reduction in value occasioned by Repurchase6,000,000New Market Value60,000,000

Number of shares outstanding after repurchase = 2,062,500 187,500 = 2,062,500 187,500 = 1,875,0001,875,000