Use the Information for the Question(s)below

question 72

Essay

Use the information for the question(s)below.
Rockwood Industries has 100 million shares outstanding,a current share price of $25,and no debt.Rockwood's management believes that the shares are underpriced,and that the true value is $30 per share.Rockwood plans to pay $250 million in cash to its shareholders by repurchasing shares.Management expects that very soon new information will come out that will cause investors to revise their opinion of the firm and agree with Rockwood's assessment of the firm's true value.
-Calculate Rockwood's stock price following the market becoming aware of the new information regarding Rockwood's true value,if (1)Rockwood completed the repurchase prior to the market becoming aware of the information and (2)Rockwood completed the repurchase following the market becoming aware of the new information.

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Definitions:

Cautious Management

A management approach characterized by careful and deliberate planning and action, often to minimize risk.

Adaptive Organizational Cultures

Cultures within organizations that are flexible and able to adjust to changes in the environment or internal conditions.

Fit Perspective

The concept that emphasizes the alignment between an individual's abilities, values, and beliefs with the requirements, culture, and values of an organization or role.

Organizational Culture

The shared values, beliefs, and practices that influence how organizational members behave.