KMS Corporation has assets with a market value of $551 million, $40 million of which are cash.

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KMS Corporation has assets with a market value of $551 million, $40 million of which are cash. It has debt of $273 million, and 11 million shares outstanding. Assume perfect capital markets.

a. What is its current stockprice?

b. If KMS distributes $40 million as adividend, what will its share price be after the dividend ispaid?

c. Ifinstead, KMS distributes $40 million as a sharerepurchase, what will its share price be once the shares arerepurchased?

d. What will its new marketdebt-equity ratio be after eithertransaction?

Related Book For answer-question

Organizational Behavior Science The Real World and You

ISBN: 978-1111825867

8th edition

Authors: Debra L. Nelson, James Campbell Quick

Posted Date: May 27, 2024 04:07 AM

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KMS Corporation has assets with a market value of $551 million, $40 million of which are cash.

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Organizational Behavior Science The Real World and You

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