question archive Problem B Po Inc
Problem B Po Inc
Subject:FinancePrice: Bought3
Problem B
Po Inc. believes that at its current share price of P16.00 the firm is undervalued. Makeover plans to repurchase 2.4 million of its 20 million shares outstanding. The Po Inc.'s managers expect that they can repurchase the entire 2.4 million shares at the expected equilibrium price after repurchase. The Po Inc.'s current earnings are P44,000,000. If management's assumptions hold, answer the following,
1) The current earnings per share is
2) What is the price to earnings ratio?
3) How much is the earnings per share after the repurchase?
4)What is the expected per-share market price after repurchase?
