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Question: The Carlton Corporation has S6 million in earnings after taxes and 3 million shares outstanding. The stock trades at a PE of 20. The firm has S3 million in excess cash.

a. Compute the current price of the stock. (Do not round intermediate calculations and round your answer to 2 decimal places.) Current price

b. if the $3 million is used to pay dividends, how much will dividends per share be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Dividends per share

c. If the $3 million is used to repurchase shares in the market at a price of $43 per share, how many shares will be acquired? (Do not round intermediate calculations and round your answer to the nearest whole share.)

Number of shares acquired shares

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92792516

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