form of repurchases, Corporate Finance

Assignment Help:

S5 Corporation is evaluating an extra dividend versus a share repurchase.  In either case, the total payout to the investors will be $10,000. Current earnings are $1 per share and the stock is selling for $50 per share.  There are 10,000 shares outstanding.  

a. What would be the price of the stock on the ex-dividend date if the firm chooses to distribute earnings in the form of cash dividends?  Ignore taxes on dividend income and capital gains while answering this question.

b.  What would be the price of the stock if the firm chooses to distribute earnings in the form of repurchases?  Again, ignore taxes on dividend income and capital gains while answering this question.


Related Discussions:- form of repurchases

Explain the trade finance, Question: Trade finance is much facilitated ...

Question: Trade finance is much facilitated by banks' intervention as guarantors for the execution of financial commitments on behalf of importers. Banks provide a large variet

The credit term "2/45 net 90" indicates, Ask questThe credit term "2/45 net...

Ask questThe credit term "2/45 net 90" indicatesion #Minimum 100 words accepted#

Preferred and common shares, Suppose cabela has 2 classes of shares. Prefer...

Suppose cabela has 2 classes of shares. Preferred and common, Cabela has 2000 shares of preferred, 4000 shares of common outstanding shares. The preferred class is 7% cumulative pr

Market efficiency, differentiate between allocative efficiency and price ef...

differentiate between allocative efficiency and price efficiency

How does an operating lease compare with a financial lease, Problem: (a...

Problem: (a) Distinguish between Non-Deposit Taking and Deposit-Taking Institutions. Provide two differences between the two types of institutions. (b) Who regulates Depos

Explain what the law is in this situation, Corporation Hallmark, located in...

Corporation Hallmark, located in California, was in the business of manufacturing custom-ordered greeting cards, boxes, wrapping paper, and other paper products. Its operation is v

Case study, Hallo I have to prepare a case study in cooperate finance. It i...

Hallo I have to prepare a case study in cooperate finance. It is a balance sheet and different adjustments. I would need your help to reflect my results. Is this possible?

Forecasting demand, The problem considered is that of forecasting demand fo...

The problem considered is that of forecasting demand for single-period products before the period starts. We study this problem for the case of a mail order apparel company that ne

Core principles for effective banking supervision, Question: a) The ne...

Question: a) The new capital management framework provides an upgrade of the old version in terms of new risk management techniques. What is the scope of application for the n

Answer required ., What will be impact on the operating leverage of a firm,...

What will be impact on the operating leverage of a firm, if it proceeds for additional borrowings?

Write Your Message!

Captcha
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!

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