tflix 6.3.2 Value Neutrality Leading With Finance: 6.3.2 Value Neutrality A reminder of our starting conditions:...

 

 

Transcribed Image Text:

tflix 6.3.2 Value Neutrality Leading With Finance: 6.3.2 Value Neutrality A reminder of our starting conditions: ASSETS LIABILITIES & NET WORTH Cash 100 60 Debt Operating 100 Assets 140 Equity 100 shares $1.40/share > Access image details Q Let's start with dividends. The company distributes $70 of that cash as a dividend to shareholders. What happens to its assets? What happens to its liabilities and net worth? And what happens to the shareholders - how much do they now have? This exercise might seem a bit tricky, but don't worry too much about getting it exactly right. Instead, try to work through your intuitions, step by step. tflix 6.3.2 Value Neutrality Leading With Finance: 6.3.2 Value Neutrality A reminder of our starting conditions: ASSETS LIABILITIES & NET WORTH Cash 100 60 Debt Operating 100 Assets 140 Equity 100 shares $1.40/share > Access image details Q Let's start with dividends. The company distributes $70 of that cash as a dividend to shareholders. What happens to its assets? What happens to its liabilities and net worth? And what happens to the shareholders - how much do they now have? This exercise might seem a bit tricky, but don't worry too much about getting it exactly right. Instead, try to work through your intuitions, step by step.