Dividends, repurchases, and firm value Remember that the primary goal of a firm is to maximize shareholder wealth by increasing the firm's intrinsic value. It is thus important to understand the impact of distributions-both in the form of dividends or stock repurchases-on the firm's value. Consider the following situation: Anusha is a financial analyst in BTR Warehousing. As part of her analysis of the annual distribution policy and its impact on the firm's value, she makes the following calculations and observations: bullet The company generated a free cash flow (FCF) of $96 million in its most recent fiscal year. bullet The firm's cost of capital (WACC) is 14%. The firm has been growing at 6% for the past six years but is expected to grow at a constant rate of 5% in the future. bullet The firm has 24.00 million shares outstanding. bullet The company has $256 million in debt and S160 million in preferred stock. Along with the rest of the finance team, Anusha has been part of board meetings and knows that the company is planning to distribute $75 million, which is invested in short-term investments, to its shareholders by buying back stock from its shareholders. Anusha also observed that, at this point, apart from the $75 million in short-term investments, the firm has no other nonoperating assets. Using results from Anusha's calculations and observations, solve for the values in the following tables. Select the best answer provided in the selection list. Based on your understanding of stock repurchases, identify whether the following statement is true or false: If a firm pays a dividend of $0.59 per share, the firm's stock price will also fall by $0.59 per share. This statement is True False because if a firm pays a dividend of S0.59 per share, the price per share of the firm's stock will also fall by $0.59 to encourage avoid any arbitrage opportunities