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KMS Corporation has assets with a market value of $484 million, $48 million of which are cash. It has debt of $177 million, and 11
KMS Corporation has assets with a market value of $484 million, $48 million of which are cash. It has debt of $177 million, and 11 million shares outstanding. Assume perfect capital markets. a. What is its current stock price? b. If KMS distributes $48 million as a dividend, what will its share price be after the dividend is paid? c. If instead, KMS distributes $48 million as a share repurchase, what will its share price be once the shares are repurchased? d. What will its new market debt-equity ratio be after either transaction? a. What is its current stock price? KMS Corporation's current stock price ishare. (Round to the nearest cent.) b. If KMS distributes $48 million as a dividend, what will its share price be after the dividend is paid? If KMS distributes $48 milion as a dividend, KMS Corporation's share price after the dividend is paid will be Sper share. (Round to the nearest cent.) c. If instead, KMS distributes $48 million as a share repurchase, what will its share price be once the shares are repurchased? If instead, KMS distributes $48 million as a share repurchase, KMS Corporation's share price after the shares are repurchased will be sper share. (Round to the nearest cent) d. What will its new market debt-equity ratio be after either transaction? After either transaction, the debt-to-equity ratio is(Round to two decimal places.)
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