Question: Problem 6 (20 points) EU Corp is an all Equity funded firm. The Net Income is 500,000 EUR the number of Shares Outstanding are 50,000

Problem 6 (20 points) EU Corp is an all Equity funded firm. The Net Income is 500,000 EUR the number of Shares Outstanding are 50,000 so the EPS is 10 EUR. Total Assets' market value is 1,000,000 EUR with 350,000 EUR in cash and 650,000 EUR in Other Assets. Current Price per Share is 20 EUR (1,000,000 EUR Equity /50,000 Outstanding Shares). EU Corp would like to use the 350,000 EUR in cash to either pay a cash dividend of 7 EUR or buy back shares Calculate: a) EPS, stock price and value of the firm with cash dividend b) EPS, stock price and value of the firm with stock repurchase

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