a. Wotan owns 1,000 shares of a firm that has just announced an increase in its dividend
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a. Wotan owns 1,000 shares of a firm that has just announced an increase in its dividend from $2.00 to $2.50 a share. The share price is currently $150. If Wotan does not wish to spend the extra cash, what should he do to offset the dividend increase?
PROBLEM SETS Visit us at www.mhhe.com/bma Chapter 16 Payout Policy 413
b. Brunhilde owns 1,000 shares of a firm that has just announced a dividend cut from
$8.00 a share to $5.00. The share price is currently $200. If Brunhilde wishes to maintain her consumption, what should she do to offset the dividend cut?
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