ECB Co. has 

1.101.10 

million shares outstanding selling at 

​$21.1821.18 

per share. It plans to repurchase 

99 comma 00099,000 

shares at the market price. What will be its market capitalization after the​ repurchase? What will be its stock​ price?

Question content area bottom

Part 1

The market capitalization after the repurchase is 

​$enter your response here. 

 ​(Round to the nearest​ dollar.)

Part 2

The stock price per share will be 

​$enter your response here. 

 ​(Round to the nearest​ cent.)

### Step-by-step breakdown:

#### Part 1: Market Capitalization After Repurchase

**Initial Market Capitalization**:
- ECB Co. has 1.10 million shares selling at \$21.18 per share.
  
To calculate the market capitalization:
\[
\text{Initial Market Capitalization} = \text{Number of Shares} \times \text{Price per Share}
\]
\[
\text{Initial Market Capitalization} = 1.10 \times 1,000,000 \times 21.18
\]

After repurchasing 99,000 shares, the new number of shares outstanding will be:
\[
\text{New Number of Shares} = 1,100,000 - 99,000 = 1,001,000 \text{ shares}
\]

The total value of the company doesn’t change during a share repurchase (market capitalization remains the same initially), so the market capitalization after the repurchase will still be:

\[
\text{New Market Capitalization} = \text{Initial Market Capitalization}
\]

#### Part 2: Stock Price After Repurchase

The stock price remains unchanged at the time of the repurchase because the total market value of the firm is spread across fewer shares.

\[
\text{New Stock Price} = \frac{\text{Initial Market Capitalization}}{\text{New Number of Shares Outstanding}}
\]

Let's calculate everything:

### Part 1: Market Capitalization After Repurchase

I'll calculate the initial market capitalization and the new stock price for you.### Results:

#### Part 1: Market Capitalization After Repurchase
The market capitalization after the repurchase remains **\$23,298,000** (rounded to the nearest dollar).

#### Part 2: Stock Price After Repurchase
The new stock price per share will be **\$23.27** (rounded to the nearest cent).

---

Would you like further details or clarifications on this process?

Here are 5 related questions for further exploration:
1. How does a stock repurchase affect a company's earnings per share (EPS)?
2. What is the difference between a stock buyback and issuing dividends?
3. How does a repurchase program impact shareholder equity?
4. Can stock repurchases influence the company's stock price in the long run?
5. What are the potential risks of a company conducting large-scale stock buybacks?

**Tip**: Stock buybacks reduce the number of outstanding shares, which can increase earnings per share (EPS) and potentially boost stock prices over time, as the value of the company is concentrated among fewer shares.

ECB Co. has 1.10 million shares outstanding selling at $21.18 per share. It plans to repurchase 99,000 shares at the market price. What will be its market capitalization after the repurchase? What will be its stock price?

Learn how to calculate the market capitalization and stock price for ECB Co. after a stock repurchase of 99,000 shares. This example covers essential financial concepts such as market capitalization and stock price adjustment, suitable for finance students.

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