Question: 6. The balance sheet for Levy Corp. is shown here in market value terms. There are 6,500 shares of stock outstanding. Cash $18,000 Equity $218,000

6. The balance sheet for Levy Corp. is shown here in market value terms. There are 6,500 shares of stock outstanding. Cash $18,000 Equity $218,000 Fixed assets $200,000 Total $218,000 Total $218,000

A) The company has declared a dividend of $1.25 per share. The stock goes ex-dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow?

B) Instead of paying dividends, suppose Levy has announced it is going to repurchase $8,125 worth of stock. How many shares will be outstanding? What will the price per share be after the repurchase? What will be the equity of the firm after the repurchase?

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