CASE 3 (25 points) The balance sheet for Samoa Corporation is shown here in market value terms. There are 2,400 million shares outstanding Market value balance sheet (6 min) Cash 315 Equity 4,022 Non-current assets 10.256 Liabilities 6.549 Total 10,571 Total 10,571 a. The company declared a cash dividend of 0.61 per share. The equity goes ex dividend tomorrow. Ignoring any tax effects, what are the shares selling for today? What will they sell for tomorrow? What will the market value balance sheet look like after the dividends are paid? (10 points) b. What If instead of cash dividend, the company has announced it is going to repurchase C1,000 million worth of equity. What effect will this transaction have on the equity of the firm? How many shares will be outstanding? What will the price per share be after the repurchase? (10 points) c.ignoring tax effects, explain how the share repurchase is effectively the same as a cash dividend. 15 points) CASE 4 (25 points) Felix Corporation has just gone public. Under a firm commitment agreement, Felix received 645 for each of the 446.6 million shares sold. The initial offering price was (47 per share, and the stock rose to CS6.50 per share by the end of the first day of trading Felix also paid CAS.S million in direct legal fees. a. What were the direct costs of the issue? (5 points) b. What were the costs of underpricing? (5 points) What were the total costs (direct costs plus underpricing) as a proportion of the market value of the shares? 15 points) d. Discuss advantages and disadvantages of a company going public (5 points) e. Explain why public companies may wish to go private. (5 points)