Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Olivantlers Magical Headgear is currently carrying $1 million in extra cash on its balance sheet. The company would like to distribute the cash back to

image text in transcribed

Olivantlers Magical Headgear is currently carrying $1 million in extra cash on its balance sheet. The company would like to distribute the cash back to the investors with a share buyback. The firm plans on buying back 10% of all shares at $28.57 per share. The stock buyback will result in $4.76 Earnings per Share (EPS) which will also be distributed to investors as 100% dividend. If an investor owns 250 share before the buyback, what will her dividend income and capital gains be after the buyback? $1,071.00; $714.25 $5,832.94; $990.00 $3,190.90; $1,050.00 $4,307.85; $681.09 $2,611.00;$400.00

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forward Lease Sukuk In Islamic Capital Markets Structure And Governing Rules

Authors: Ahcene Lahsasna , M. Kabir Hassan , Rubi Ahmad

1st Edition

3319942611,331994262X

More Books

Students also viewed these Finance questions

Question

4. List some nonbusiness applications of fuzzy logic.

Answered: 1 week ago

Question

12(25) 70 0.07 12 A = 0.07 12

Answered: 1 week ago