8. DRIPs. A firm considers initiating an aggressive dividend reinvestment plan (DRIP) in which it allows its
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8. DRIPs. A firm considers initiating an aggressive dividend reinvestment plan (DRIP) in which it allows its investors to use dividends to buy shares at a discount of 40% from current market value. The firm's financial manager argues that the policy will benefit shareholders by giving them the opportunity to buy additional shares at a deep discount and will benefit the firm by providing a source of cash. Is the manager correct? (LO4)
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Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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