Apple had a net income of $4,200 million last year and just paid a dividend of $32.4 per share. Just before the ex-dividend day, the stock closed at $428 and there were 320 million shares outstanding. Assume perfect capital markets (ignore taxes and signalling effects).

Part 1

What opening stock price do you expect on the ex-dividend date?

Part 2

What are earnings per share after the dividend payment?

Part 3

What is the price-earnings ratio after the dividend payment?

Part 4

If Apple had decided to spend the same amount to buy back its own shares instead of paying dividends, what would have been the share price after the repurchase?

Part 5

What are earnings per share after the repurchase?

Part 6

What is the price-earnings ratio after the repurchase?