ABC Ltd has 5 million shares priced at 50. It has excess cash of 50 million, which

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ABC Ltd has 5 million shares priced at ₹50. It has excess cash of ₹50 million, which it decides to pay out as a one-time cash dividend.

a. What is the ex-dividend price of a share?

b. If the board decides to use the excess cash for share buyback instead of paying dividends, what is the price of the share post share repurchase?

c. As an investor, you prefer to get dividends, but the company is repurchasing shares. How can you leave yourself in the same position as if the company had made a dividend payment?

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Corporate Finance Theory And Practice In Emerging Economies

ISBN: 9781108486965

1st Edition

Authors: Sunil Mahajan

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Question Posted: Feb 24, 2024 03:01 AM

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ABC Ltd has 5 million shares priced at 50. It has excess cash of 50 million, which

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Impact of Dividend vs Share Buyback on ABC Ltd a ExDividend Price When a company declares a cash div...View the full answer

Corporate Finance Theory And Practice In Emerging Economies

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