werdtotheblue691
01.12.2021 •
Business
Which of the following is a true statement about 401k?
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Ответ:
Total market value of shares
= 1.25 billion x $20
= $25 billion
Market value of the share after share repurchase
= $25 billion - $5 billion
= $20 billion
Number of shares repurchased
= $5 billion/$20 per share
= 0.25 billion shares
Number of shares outstanding after the share repurchase
= 1.25 billion shares - 0.25 billion shares
= 1 billion shares
Market price per share after repurchase
= $20 billion/1 billion shares
= $20 per share
The correct answer is D
Explanation:
The market value of the company's shares should be calculated which is a function of number of shares outstanding multiplied by market price per share. Then, we will calculate the market value after the share repurchase by deducting the value of share repurchase from the total market value. we also need to calculate the number of shares repurchased by dividing the cash available by market price per share. Number of shares outstanding after the share repurchase is the difference between the total number of shares and the number of shares repurchased. Finally, the market price per share after the share repurchase is calculated by dividing the market value of shares after repurchase by the number of shares outstanding after repurchase.