Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate wional free cash flows of $50 million per year

image text in transcribed
Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate wional free cash flows of $50 million per year in subsequent years and will pay out these future free cash flows us regular dividends. Omicron's unlevered cost of capital is 10% and there are 10 million shares outstanding. It Omnicron Technologies used the excess cash to repurchase shares, what is the price of the stock after share repurchase? Select one: a. $50 a share O b. $55 a share O c. $45 a share O d. None of the answers is correct

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

Corporate Finance A Valuation Approach

Authors: Simon Benninga, Oded Sarig

1st Edition

0071140727, 978-0071140720

More Books

Students also viewed these Finance questions

Question

How to find the equation of a circle under vertical dilation

Answered: 1 week ago

Question

4. Describe an artificial intelligence application.

Answered: 1 week ago