Question
A corporation decides to increase its dividend payment from $1.75 per share to $4.85. before the announcement, the stock price is at $`112 and the
A corporation decides to increase its dividend payment from $1.75 per share to $4.85. before the announcement, the stock price is at $`112 and the total number of shares outstanding is 40 million. the corporation will issue new shares to recoup the extra cash paid out as dividends. dividends will be paid after the issuance of the new shares. assume the investors learn nothing new from the announcement of future cash flows, how many shares will the firm need to issue to payout additional dividends in cash? a) 1.10 million b) 1.12 million c) 1.15 million d) 0.77 million
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