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5. Suppose Genron will pay 40 million to shareholders tonight, and then pay all free cash flows as dividends in future years. The company has

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5. Suppose Genron will pay 40 million to shareholders tonight, and then pay all free cash flows as dividends in future years. The company has no debt and 5 million equity shares outstanding. The cost of capital on equity is 10%, and the expected annual future cash flow is 40 million. What is (a) Genron's cum-dividend price? (b) How about its ex-dividend price? (25) A). (a) 80; (b) 82 C). (a) 45: (b) 40 B). (a) 88: (b) 80 D). (a) 55; (b) 50 E). none of the above

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