KMS Corporation has assets with a market value of $ 426 million, $ 25 million of which

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KMS Corporation has assets with a market value of $ 426 million, $ 25 million of which are cash It has debt of $ 224 million, and $15 million shares outstanding Assume perfect capital markets

a What is its current stock price

b If KMS distributes $ 25 million as a dividend, what will its share price be after the dividend is paid

c If instead, KMS distributes $ 25 million as a share repurchase, what will its share price be once the shares are repurchased

d What will its new market debt-equity ratio be after either transaction?

Related Book For answer-question

Introduction to Derivatives and Risk Management

ISBN: 978-1305104969

10th edition

Authors: Don M. Chance

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Posted Date: Jan 24, 2021 03:18 AM

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KMS Corporation has assets with a market value of $ 426 million, $ 25 million of which

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a current stock price 426 224 15 1346 per share b If KMS distributes ... View the full answer

Introduction to Derivatives and Risk Management

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