a) “A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm? b) The Olive Vase has 56,000 shares of stock outstanding with a par value of $1 per share and a market value of $11 a share. The company just announced a 3-for-4 reverse stock split. Currently, you own 500 shares of this stock. What is the total value of your stock? What will the total value of your shares be after the reverse stock split?
a) “A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm? b) The Olive Vase has 56,000 shares of stock outstanding with a par value of $1 per share and a market value of $11 a share. The company just announced a 3-for-4 reverse stock split. Currently, you own 500 shares of this stock. What is the total value of your stock? What will the total value of your shares be after the reverse stock split?
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 5TP: Research online to find a company that bought back shares of its own stock (treasury stock) within...
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Question 5
a) “A stock repurchase carries information content”. What type of information has been referred to in this statement? What impact is likely to have on the stock price of a firm?
b) The Olive Vase has 56,000 shares of stock outstanding with a par value of $1 per share and a market value of $11 a share. The company just announced a 3-for-4 reverse stock split. Currently, you own 500 shares of this stock. What is the total value of your stock? What will the total value of your shares be after the reverse stock split?
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