19. Refer back to Problem 18. Assume no taxes and a stock price immediately after the dividend...

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19. Refer back to Problem 18. Assume no taxes and a stock price immediately after the dividend announcement of $100.

a. If you own 100 shares, what is the value of your investment? How does the dividend payment affect your wealth?

b. Now suppose that Formaggio Vecchio cancels the dividend payment and announces that it will repurchase 1% of its stock at $100. Do you rejoice or yawn? Explain.

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Principles Of Corporate Finance

ISBN: 9780071314176

10th Global Edition

Authors: Richard Brealey

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Question Posted: Jul 27, 2024 10:01 AM

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19. Refer back to Problem 18. Assume no taxes and a stock price immediately after the dividend...

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Principles Of Corporate Finance

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