Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help asap. Anyone? The market-value balance sheet for Tuatara Inc. is shown in the following table. It has 10.000 shares outstanding. Tuatara Inc.
I need help asap. Anyone?
The market-value balance sheet for Tuatara Inc. is shown in the following table. It has 10.000 shares outstanding. Tuatara Inc. wants to distribute $20.000 of its earnings to its shareholders. Ignore taxes. Assets Liabilities and Equity Cash $100,000 Equity $1,000,000 Fixed Assets 900,000 a. Show what happens to the share price if Tuatara distributes the earnings in the form of dividends. (4 marks) b. Show what happens to the share price if Tuatara distributes the earnings in the form of stock repurchase. (4 marks) C. Show the effect of the dividend payment on the wealth of an investor who has 100 shares. (4 marks) d. Show the effect of the repurchase on an investor who currently holds 100 shares and sells 1 of those shares back to the company in the repurchase. Continue to ignore taxes Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started