Suppose Al Dente from Example 17.3 changes his mind and cuts out Consolidated's year-1 dividend entirely, instead

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Suppose Al Dente from Example 17.3 changes his mind and cuts out Consolidated's year-1 dividend entirely, instead spending $10 million to buy back stock. Are shareholders any better or worse off than if Consolidated had paid out $10 million as cash dividends?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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