Now suppose that instead of paying a dividend, Good Values (from problem 14) plans to repurchase $10,000

Question:

Now suppose that instead of paying a Good Values (from problem 14) plans to repurchase $10,000 worth of stock.
a. What will be the stock price before and after the repurchase?
b. Suppose an investor who holds 200 shares sells 20 of her shares back to the firm. If there are no taxes on dividends or capital gains, show that she should be indifferent toward the repurchase and the For this part, use the tax rate from your answer to part (b) in problem 14 and assume that capital gains are not taxed. Is the value of the firm higher or lower if it pursues the share repurchase instead of the 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...