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Harns Corporation has S218 milion n cash and 146 million shares ou standing. Suppose the corporate tax rate is 32%, and investors pay no taxes
Harns Corporation has S218 milion n cash and 146 million shares ou standing. Suppose the corporate tax rate is 32%, and investors pay no taxes on dividends, capital gains or interest income. Investors had expected Harris to pay out the $218 million through a share repurchase. Suppose instead that Harris announces it will permanently retain the cash, and use the interest on the cash to pay a regular dividend. If there are no other benefits of retaining the cash, how will Harris' stock price change upon this announcement? After the announcement Harris' stock price will | | by SL per share. (Select from the drop-down menu and round the share price to three decimal places.)
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