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The equity of Enterprise Holds Inc. has a market v...

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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 a special dividend of $6.00 per share or a stock repurchase for cash. A)If management estimates that a stock repurchase announcement will increase the stock price by 5%, how many shares should they be prepared to repurchase? b. What are the pros and cons of each alternative: a special dividend of $6.00 per share or a stock repurchase for cash?,12. The equity of Enterprise Holdings, 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 stock repurchase for cash. a. If management estimates that a stock repurchase announcement will increase stock price by 5 percent, how many shares should they be prepared to repurchase? b. Can you think of any reasons a share repurchase might be preferable to a special dividend?,12. The equity of Enterprise Holdings, 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 stock repurchase for cash. a. If management estimates that a stock repurchase announcement will increase stock price by 5 percent, how many shares should they be prepared to repurchase? b. Can you think of any reasons a share repurchase might be preferable to a special dividend?

 

Paper#13789 | Written in 18-Jul-2015

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