Homework #8 Dividend Policy 2. (20 points) Following the previous question. At the ex-dividend date, the share price of the company should fall. Please fill up the share prices before and after the dividend. Assume there are no taxes or transaction costs. $? Share Price = $? $? Ex-dividend date Time Homework #8 Dividend Policy 3. (40 points) A company has no debt and is considering returning excess cash to the stockholders. The company currently has 3 outstanding shares with price at $4 each. If it intends to return $3 in total to the stockholders, can you fill up the analysis below to demonstrate the differences between stock repurchases and dividends? Equity = $12 (3 shares at $4 per share) Stock Repurchase Equity = $? ( shares at $? per share) Afterwards Dividends Equity = $12 (3 shares at $4 per share) Equity = ( shares at per share) Afterwards Homework #8 Dividend Policy 2. (20 points) Following the previous question. At the ex-dividend date, the share price of the company should fall. Please fill up the share prices before and after the dividend. Assume there are no taxes or transaction costs. $? Share Price = $? $? Ex-dividend date Time Homework #8 Dividend Policy 3. (40 points) A company has no debt and is considering returning excess cash to the stockholders. The company currently has 3 outstanding shares with price at $4 each. If it intends to return $3 in total to the stockholders, can you fill up the analysis below to demonstrate the differences between stock repurchases and dividends? Equity = $12 (3 shares at $4 per share) Stock Repurchase Equity = $? ( shares at $? per share) Afterwards Dividends Equity = $12 (3 shares at $4 per share) Equity = ( shares at per share) Afterwards