Adv. Corp Finance

Eric owns 2,000,000 shares of Wiseguy Entertainment. Wiseguy's stock is currently selling for $5.00. Assume a world of no taxes. a. If Erik wants an annual "dividend income" of $50,000 from his stock holding, what must he do to get these level of income? What is his totalm wealth in paper (stocks) and in cash after his transaction? Answer: Erik need to (buy or sell shares of stocks his total wealth in paper (stocks) and in cash after his transaction will be b. Wiseguy just paid a cash dividend of $0.05 per share. If Erik does not want the dividends, what must he do to "undo" the dividend? What is his total wealth in paper (stocks) and in cash after his transaction? Answer: Erik need to (buy or sell) shares of stocks his total wealth in paper (stocks) and in cash after his transaction will be