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Assume perfect markets and no taxes. A firm received an unexpected flow of $ 20,000,000. The CEO is considering two possible uses for this money:
Assume perfect markets and no taxes. A firm received an unexpected flow of $ 20,000,000. The CEO is considering two possible uses for this money: dividend payments (for 10,000,000 shares outstanding) or equity repurchase. The stock price of this company before the unexpected cash flow was $8/share. If the CEO decides to buy stocks, how many shares would he be able to buy?
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1,000,000
2,000,000
3,000,000
4,000,000
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