Unformatted text preview: d earnings by selling shares, they are willing to invest in
companies that retain earnings rather than paying out earnings as dividends. Well
functioning capital markets allow the firm to serve all its stockholders simply by
maximizing value. 4. a. It appears that par value is approximately $0.05 per share, which is computed as
follows: $213 million/4,260 million shares
b. The shares were sold at an average price of: [$213 million + $5,416 million]/4,260 million shares = $1.32
c. The company has repurchased: 4,260 million 3,847 million = 413 million shares.
d. Average repurchase price: $6,851 million/413 million shares = $16.59 per share.
e. The value of the net common equity is: $213 million + $5,416 million + $10,...
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