Natsam Corporation has $350 million of excess cash. The firm has no debt and 550 million shares outstanding with a current market price of $14 per share.Natsam's board has decided to pay out this cash as aone-time dividend.

a. What is theex-dividend price of a share in a perfect capitalmarket?

Theex-dividend price is $................ on a per share basis.(Round to the nearestcent.)

b. If the board instead decided to use the cash to do aone-time sharerepurchase, in a perfect capital market what is the price of the shares once the repurchase iscomplete?

If the board instead decided to use the cash to do aone-time sharerepurchase, the price will be $...................per share.(Round to the nearestcent.)

c. In a perfect capitalmarket, whichpolicy, in part (a) or (b), makes investors in the firm betteroff?(Select the best choicebelow.)

A.The value of the firm is the same under either policy.

B.Part (a)

C.Part (b)