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

Maeket Value of Equity (10000 Share)= $404200

Current Market Price per Share= $404200/10000= $40.42

No. of Share Repurchased =$19000/$40.42 =470.06 Share or 470 Share

No. of Share Outstanding after repurchase= 10000-470 =9530 Shares

New Stock Price =$40.42

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