consider the following data for ABC Corp:

earnings per share for 2017 $3.30

Number of shares outstanding 24,000,000

Planned dividend per share $1.65

Stock price for year end $78

There are no corporate personal taxes. Assume that investors learn nothing about the company's prospects from any announcement made by ABC Corp regarding dividends, share repurchases or issue of new shares.

ABC Corp plans to pay the entire dividend early in January 2018.

a) what will ABC corp's share price be after the planned dividend payout, other things equal?

b) Suppose the company announces that it will cancel the dividend and use the cash saved to repurchase shares:

i) what happens to the stock price on announcement date?

ii) how many shares will ABC Corp need to repurchase?

c) instead of the scenario in part(b) above, the company announces that it will increase dividends from $1.65 per share to $3.30 per share and then issue new shares to recoup the extra cash paid out as dividends:

i) what is the ex-dividend price?

ii) how many shares will ABC corp need to issue?