BD_DC17 - Solution to Chapter 17 Data Case Amazon 1a...

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Solution to Chapter 17 Data Case Amazon 1a Current Price 32.92 at close on 7/14/2006 Shares Outstanding 417,865,000 13,756,115,800 Mkt Value of Eq 2 Cash Avail 506,500,000 2a # Shares Purchased 15,385,784 Percent of Total 3.68% 2b Div Per Share 1.21 Investor 3b Initial Purch. Price 22.01 # Shares held 1,000,000 # Shares sold 36,820 Tax Rates Cap Gains 0.15 Dividends 0.15 4 Net Gains Repurchase Dividend Difference (Repurch-Div) Pre-tax Cash $1,212,113.96 $1,212,113.96 $0 Taxes $60,255.91 $181,817.09 After-tax Cash $1,151,858.05 $1,030,296.87 $121,561 5 Stock Price After 32.92 31.71 Remaining Shares 963,180 1,000,000 Proceeds from Sale Pre-tax $31,707,886 $31,707,886 Taxes $1,576,244 $1,454,683 After-tax $30,131,642 $30,253,203 Total Pre-tax CF $32,920,000 $32,920,000 $0 Total After-tax CF $31,283,500 $31,283,500 $0 7 Stock Return 10% per year 5-year Sale Years 5 Sale Price 53.02 51.07 Repurchase Dividend Proceeds from Sale Pre-tax 51,065,868 51,065,868 Taxes $4,479,941 $4,358,380 After-tax
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This note was uploaded on 02/02/2012 for the course BUS 438 taught by Professor Dutt during the Winter '12 term at Cal Poly.

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BD_DC17 - Solution to Chapter 17 Data Case Amazon 1a...

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