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).

 

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

 

What are earnings per share after the dividend payment?

 

 

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

 

 

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?

 

What are earnings per share after the repurchase?

 

What is the price-earnings ratio after the repurchase?