Respuesta :
If the price dropped by 10%, it would cost $214.1 million for Chester Corporation to repurchase all of its outstanding shares.
What is market value?
The price at which an asset would trade in a crowded auction is known as the market value (OMV). Market value, fair value, and open market value are frequently used interchangeably even though they have different meanings under various criteria and may differ under specific circumstances.
Why is market value important?
Market value is important for a variety of reasons, including the fact that it provides a straightforward method for determining an asset's value, eliminating any opportunity for uncertainty or ambiguity. Customers' and sellers' assessments of a product's market value frequently differ.
According to the given information:
To calculate the market value
outstanding shares x Closing price per share
= 1906233 × 112.33
= $214.1 million
therefore, if the price dropped by 10%, it would cost $214.1 million for Chester Corporation to repurchase all of its outstanding shares.
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Complete question
How much would it cost for Chester Corporation to repurchase all its outstanding shares if the price went up by 10%? Assume no brokerage fees.
(A) $235.5 million
(B) $101.3 million
(C) $214.1 million
(D) $111.4 million
