What would you expect the share price after the repurchase to be?

CORRECT TEXT

A company is planning to repurchase some of its shares.

Relevant details are as follows:

• 100 million shares in issue

• Current share price $5

• 5 million shares to be repurchased

• 10% repurchase premium

• Repurchased shares to be cancelled

What would you expect the share price after the repurchase to be?

Give your answer to two decimal places.

$ ?

View Answer

Answer: 4.97, 4.98