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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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