Please help me with all of the following questions. Thankksss Stock repurchases
ID: 2670479 • Letter: P
Question
Please help me with all of the following questions. Thankksss
Stock repurchases Overholser Inc. has forecast net Income of $8,000,000 over the next year. Overholser forecasts a capital budget of $8.000.000 for the year. If the firm maintains its capital budget of 50% equity and 50% debt, how much of a dividend can Overholser pay if it follows a strict residual dividend policy? $7,000.000 $6,000,000 $4,000.000 $8,000,000 $5,000.000 Instead of paying a cash dividend. Overholser is considering a stock repurchase. The firm currently has 1,500,000 shares of common stock outstanding that have a current market price of $80 per share. If Overholser carries out the repurchase, it expects to be able to buy the stock at its current market price What is Orerholser's current price-to-earnings (P/E) ratio? 15.00 16.00 11.00 13.00 10.00 If Overholser has the amount predicted by the residual dividend model available to pay to shareholders, how many shares can it repurchase? 37,500 shares 62,500 shares 50,000 shares 100.000 shares 75,000 shares If the firm's P/E ratio expected to be the same after the repurchase, what is Overholser's expected stock price after the repurchase? $83 79 $85 71 $81.74 $84.21 $82.76Explanation / Answer
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