Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. harris shipping company has excess cash of $300,00

Harris Shipping Company has excess cash of $300,000 and 200,000 total shares outstanding. The firm pays...

90.2K

Verified Solution

Question

Finance

Harris Shipping Company has excess cash of $300,000 and 200,000total shares outstanding. The firm pays no dividends and its netincome for the year just ended is $100,000. The market valuebalance sheet at the end of the year is shown below. Assume thatthe entire amount of excess cash will be utilized for sharerepurchase at the current market price. Calculate theprice-earnings ratio after the repurchase.

Market Value Balance Sheet
(before paying out excess cash)
Excess Cash$300,000Debt$0
Other Assets$900,000Equity$1,200,000
Total$1,200,000Total$1,200,000

Answer & Explanation Solved by verified expert
4.3 Ratings (742 Votes)
SEE THE    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Harris Shipping Company has excess cash of $300,000 and 200,000total shares outstanding. The firm pays no dividends and its netincome for the year just ended is $100,000. The market valuebalance sheet at the end of the year is shown below. Assume thatthe entire amount of excess cash will be utilized for sharerepurchase at the current market price. Calculate theprice-earnings ratio after the repurchase.Market Value Balance Sheet(before paying out excess cash)Excess Cash$300,000Debt$0Other Assets$900,000Equity$1,200,000Total$1,200,000Total$1,200,000

Other questions asked by students

Q

the dermis is made of irregular fibrous connective tissue. what is the structure and makeup of the...

Medical Sciences
Q

What types of economic process applicate for firing process in tile and brick ?

Civil Engineering
Q

1) Discuss liquidity management of a bank and the tools and options to address liquidity by...

Finance
Q

Given an equilateral triangle with side Find E at the centroid The linear charge density...

Physics
Q

Question 11 of 16 companying data are the length in centimeters and girths in centimeters...

Statistics
Q

Sketch the graph of the function by applying the Leading Coefficient Test finding the real...

Calculus
Q

Albuquerque, Inc., acquired 36,000 shares of Marmon Company several years ago for $720,000. At the...

Accounting
Q

In preparing its cash flow statement for the year ended December 31, 2016, Red Co....

Accounting
Q

qualified replacement property that he acquired six months later for $389,950. What is the amount...

Accounting
Q

Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would...

Accounting
Q

No-Growth Industries pays out all of its earnings as dividends. It will pay its next...

Finance
Q

The following information is available with regards to the palm oil futures market at the...

Accounting