Question: Problem 6 (20 points) EU Corp is an all Equity funded firm. The Net Income is 1,000,000 EUR the number of Shares Outstanding are 200,000

Problem 6 (20 points) EU Corp is an all Equity funded

Problem 6 (20 points) EU Corp is an all Equity funded firm. The Net Income is 1,000,000 EUR the number of Shares Outstanding are 200,000 so the EPS is 5 EUR. Total Assets' market value is 10,000,000 EUR, with 250.000 EUR in cash and 9,750,000 EUR in Other Assets. Current Price per Share is 50 EUR (10,000,000 EUR Equity / 200,000 Outstanding Shares). EU Corp would like to use the 250.000 EUR in cash to either pay a cash dividend of 1.25 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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