What is ex-dividend price of share in perfect capital market

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Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Natsam’s board has decided to pay out this cash as a one-time dividend.

What is the ex-dividend price of a share in a perfect capital market?

If the board instead decided to use the cash to do a one-time share repurchase, in a perfect capital market, what is the price of the shares once the repurchase is complete?

In a perfect capital market, which policy in part (a) or (b) makes investors in the firm better off?

Reference no: EM13971039

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