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all these questions go together. please explain each step. i really appreciate all the help. KWC is a public corporation traded on NASDAQ. KWC's assets

all these questions go together. please explain each step. i really appreciate all the help.

KWC is a public corporation traded on NASDAQ. KWC's assets generate a perpetual, annual free cash flow of $240 million, including this year. KWC is all equity financed and currently has 100 million shares outstanding. Since KWC has exhausted its growth opportunities, its board decides to announce its first cash dividend using its earnings from the current year ($240 million in total). The day after the announcement, it will pay this cash dividend. (For valuation purposes, ignore this one day period.) The firm's cost of capital is 10%. Ignore corporate and personal taxes.

A. What is the share price of KWC before the announcement and dividend payment?

B. What is KWC's share price after the board announces its first dividend?

C. What is KWC's share price after the dividend payment (i.e., the ex-dividend price)?

Suppose that instead of paying out year 0 earnings as a single dividend, the board announces that it will pay quarterly dividends of $0.6 per share over the coming year, with the first dividend being paid the day after the announcement.

(d) (Dividend Effect) What is KWC's share price after the first dividend payment?

(e) (Announcement Effect) What happens to KWC's share price after the quarterly dividend announcement in Part D? Without doing calculations, please choose one of the following: Increase, Decrease, No Change

Suppose that instead of paying cash dividends, KWCs board decides to use the earnings of $240 million in year 0 to conduct a share repurchase in the open market. The share repurchase will happen one day after the announcement.

(f) What happens to KWCs share price after the board announces this decision? Without doing calculations, please choose one of the following: Increase, Decrease, No Change

(g) At what price will KWC buy back its shares?

(h) How many shares can KWC buy back?

(i) What will the earning per share be next year (and in subsequent years) after the share repurchase?

(j) What will KWCs share price be right after the share repurchase?

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