AAA Enterprises has made a before-tax profit of $500 million. The firm has no debt and 100 million shares outstanding, with a current market price of $20 per share. AAA's board is currently deciding whether to pay out this profit to shareholders through a dividend or a one- time share repurchase. (a) If the board chooses to pay a dividend, what is the ex-dividend price of the shares in a perfect capital market with no taxes? (b) If the board instead chooses to use the cash to do a one-time share repurchase, in a perfect capital market with no taxes, what is the price of the shares once the repurchase is complete? (c) Suppose that the board decides to pay a dividend Now assume that AAA Enterprises pays corporate taxes of 30% and the marginal tax rate for shareholders is 20%. What is the after- tax dividend and effective tax rate for shareholders: (1) Under a classical tax system? (ii) Under an imputation system (assuming that the dividend is 70% franked)? AAA Enterprises has made a before-tax profit of $500 million. The firm has no debt and 100 million shares outstanding, with a current market price of $20 per share. AAA's board is currently deciding whether to pay out this profit to shareholders through a dividend or a one- time share repurchase. (a) If the board chooses to pay a dividend, what is the ex-dividend price of the shares in a perfect capital market with no taxes? (b) If the board instead chooses to use the cash to do a one-time share repurchase, in a perfect capital market with no taxes, what is the price of the shares once the repurchase is complete? (c) Suppose that the board decides to pay a dividend Now assume that AAA Enterprises pays corporate taxes of 30% and the marginal tax rate for shareholders is 20%. What is the after- tax dividend and effective tax rate for shareholders: (1) Under a classical tax system? (ii) Under an imputation system (assuming that the dividend is 70% franked)