InternationalCorporateFinance幻灯片.pptVIP

Stock Repurchase versus Dividend Assets Li abilities Equity C. After stock repurchase Cash $50,000 Debt 0 Other assets 850,000 Equity 900,000 Value of Firm 900,000 Value of Firm 900,000 Shares outstanding = 90,000 Price per share = $900,000 / 90,000 = $10 If they distribute the $100,000 through a stock repurchase, the balance sheet will look like this: Forward Market Hedge Where do the numbers come from? We owe our supplier ￡100 million in one year—so we know that we need to have an investment with a future value of ￡100 million. Since i￡ =