Given: -Sarah owns 500 shares of Dolphin Corp. -Sarah paid an average of $25/share -There are 100,000
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Question:
Given:
-Sarah owns 500 shares of Dolphin Corp.
-Sarah paid an average of $25/share
-There are 100,000 shares outstanding for Dolphin Corp., and there is no income tax
-Dolphin Corp. has $300,000 it can use to either:
(a) pay a dividend or
(b) repurchase shares on the open market
-The current price for shares of Dolphin Corp. is $30
Required:
-If Dolphin Corp. chose to pay a dividend, how much cash would Sarah have?
-How much would Sarah's shares of Dolphin Corp. be worth?
-If Dolphin Corp. chose to repurchase shares, how much would Sarah's shares be worth?
Related Book For
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald
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