Assume perfect markets and no taxes. A firm received an unexpected flow of $ 20,000,000. The CEO is considering two possible uses for this money: dividend payments (for 10,000,000 shares outstanding) or debt payment. The stock price of this company before the unexpected cash flow was $10/share. If the CEO decides to pay the debt, the new share price (after debt payment) will be:

a.)9

b.) 10

c.) 11

d.) 12

Answer rating: 100% (QA)

The new share price after debt payment would be 12 Heres why Perfect markets and no taxes This assum... View the full answer