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Exercise 4. A company is planning to pay EUR 1 million in dividend to its common shareholders this year. Enclosed the following earnings and market
Exercise 4. A company is planning to pay EUR 1 million in dividend to its common shareholders this year. Enclosed the following earnings and market price information for the company: Net income 1,500,000 200,000 Number of shares Expected market price per share after the dividend p: 17 The company is considering 2 options: Option 1 - repurchase share at a price of EUR 17 Evaluate the company's share price after the repurchase by calculating the EPS and estimated share price. Option 2 - announce a 5 for 1 share split for its shareholders Assuming that the company chose option 2, how many shares outstanding would the company have and what would be its EPS after the split
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