MD Groceries currently sets its initial cash balance at $5,000, which is depleted every four days. The current market rate of return is 4.5% per year. The firm pays $2.50 each time it replenishes its cash account. Use a 360-day year. What are the opportunity costs for MD's decision regarding its cash balance? Multiple Choice $112.50 per year $65.00 per year O $50.00 per year $225.00 per year Alex, Inc. is financed 100% with equity. The firm has 100,000 shares of stock outstanding with a market price of $5 per share. Total earnings for the most recent year are $50,000. The firm has cash of $25,000 in excess of what is necessary to fund its positive NPV projects. The firm is considering using the cash to pay an extra dividend of $25,000 or, alternatively, to repurchase $25,000 of stock. The firm has other assets worth $475,000 (market value). For each of the questions that follow, assume there are no transaction costs, taxes, or other market imperfections. 04 Assume the firm uses the $25,000 excess cash to buy back stock at $5 per share. What will be the firm's earnings per share after the repurchase? HUAWEI Multiple Choice $0.50 $0.45 $0.53 17 of 65 Next >