A firm's next-period market value of equity is $2.5 million and there are 100,000 shares outstanding, with
Question:
a. What is the current stock price if the firm pays $500,000 in cash dividends?
b. What is the number of shares outstanding if a firm spends its extra $500,000 to buy back shares at $30 per share instead of paying $500,000 in cash dividends?
c. What is the current stock price if a firm spends its extra $500,000 to buy back shares at $30 per share instead of paying $500,000 in cash dividends?
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a Paying cash dividends P 0 P 1 D 1 1K 255 1015 ...View the full answer
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Related Book For 
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
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