Suppose Microsoft has 8.15 billion shares outstanding and pays a marginal corporate tax rate of 37%. If

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Suppose Microsoft has 8.15 billion shares outstanding and pays a marginal corporate tax rate of 37%. If Microsoft announces that it will pay out $52 billion in cash to investors through a combination of a special dividend and a share repurchase, and if investors had previously assumed Microsoft would retain this excess cash permanently, by how much will Microsoft’s share price change upon the announcement?

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Corporate Finance The Core

ISBN: 9781292431611

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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