User Account

All Pages

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

Assignment Help Finance Basics
Reference no: EM13267761

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. Natsamâ's board has decided to payout this cash as a one-time dividend.

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

b. 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?

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

 

Reference no: EM13267761

Questions Cloud

Find the systems zero-state response y for the input x : The unit impulse response of an LTIC systems is h(t) = (1- 2t)e^-2t * u(t) Find this system's (zero-state) response y(t) if the input x(t) is: 1) u(t) 2) e^-t u(t) 3) e^-2t u(t) 4) sin(3t) u(t)
What net tax savings per share for an investor : Suppose that all capital gains are taxed at a 25% rate and that the dividend tax rate is 50%. Arbuckle Corporation is currently trading for $30 and is about to pay a $6 special dividend.
What impact has the mass media had on your family system : What impact has the mass media had on your family system and what does the graph on "Favorite Ways to Spend an Evening" tell us about contemporary family life?
What is the final pressure if one-tenth of the gas escapes : A high-pressure gas cylinder contains 50.0 L of toxic gas at a pressure of 1.80 ? 107 N/m2 and a temperature of 23.0°C. What is the final pressure if one-tenth of the gas escapes
What is ex-dividend price of a share in a perfect capital : 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. Natsamâ's board has decided to payout this cash as a one-time dividend.
Use of cultural-economic and political and global turnings : How would the use of cultural, economic and political turnings enhance your understanding of how global turnings are impacting your ability to make sense of organizations in which you work, serve, and take an interest? Provide details and support for..
Discuss rationale behind the principle of increasing cost : Microeconomics BACC107,  In the study of Microeconomic, the question "How to produce" is one of the basic economic problems (BEPs). Using an example, discuss this concept. In your discussion, you must also discuss the rationale behind the principle o..
What is the lifetime according to a hypothetical person : Suppose a pion is moving at a speed of 0.986c, and an observer who is stationary in a laboratory measures the pion's lifetime to be2.7 × 10-8 s. What is the lifetime according to a hypothetical person who is riding along with the pion
What is the required rate of return on the sanding machine : Initially Firm A has a beta of 1.3, when Rrf= 7 percent and Rm=12 percent. The firm now sells 10 percent of its assets (beta=1.2) and uses the proceeds to purchase another asset, a sanding machine, with a beta of .7.

Reviews

Write a Review

Finance Basics Questions & Answers

  Estimating cost of capital

Canyon Corporation has two divisions: Division A makes up 50% of the company, while Division B makes up the other 50%. Canyon's beta is 1.2.

  Calculate operating cash flow

A project has a contribution margin of 5$, projected fixed costs of $13,000, projected variable cost each unit of $12, & a projected present value break-even point of 5,500 units.

  What is the yield that trevor would earn by selling

Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $964.59. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,050.46, what is the yield that Trevor would earn by s..

  Supply and demand price rises

Why do you believe that it is significant for managers to understand both short run and long run supply & demand? Cite one hypothetical or real life example that illustrates response.

  Calculate her maximum contribution to a coverdell education

Shania, a single parent, has modified AGI of $98,000. Calculate her maximum contribution to a Coverdell Education Savings Account for her 8-year old son in 2013.

  Entry to record the purchase

Fison Corporation purchased 15,000 shares of its $2 par common stock at a cost of $12 each share on April 30, 2006. The stock was originally issued at $10 each share.

  Decision making on the basis of expected return

Decision making on the basis of expected return and volatility of project and Suppose you have two good projects in which you could invest

  Compute operating and financial and total leverage

Based on fixed costs of $11,520,000, variable costs of $11.25 per unit, production volumes of 4,975,000 units, with an interest expense of $1,326,400

  Differences and similarities of common stocks and bonds

Contrast the differences/similarities of common stocks and bonds. Explain how they would be used in the corporate environment.

  What is the present value of the dividend stream

The peso-denominated dividend is expected to grow at a rate of 8% a year indefinitely.

  Explain decision making on the basis of the net present

Explain decision making on the basis of the net present value criterion and profitability index of a project with a net investment of $20,000

  Objective type question bond yield and valuation

Objective type Question Bond Yield and Valuation and Identify the choice that best completes the statement or answers the question

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd