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A Company is evaluating an extra dividend versus a share repurchase. In either case, $ 5 , 5 0 0 would be spent. Current earnings
A Company is evaluating an extra dividend versus a share repurchase. In either case, $ would be spent. Current earnings are $ per share, and the stock currently sells for $ per share. There are shares outstanding. Ignore taxes and other imperfections. You own one share of stock in this company. If the company issues the dividend, your total investment will be worth as compared to if the company opts for a share repurchase. What is the next stock price? What is the stock value with dividend options? How many shares has the company purchased during the period? What is the shareholder value?
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