Question
Payday Inc.wants to issue $2 million of debt @ 5% to either issue a dividend or complete a share repurchase.The stock is currently trading at
Payday Inc.wants to issue $2 million of debt @ 5% to either issue a dividend or complete a share repurchase.The stock is currently trading at $25 per share and there are 500,000 shares outstanding. The tax rate is 20%.
What would be the new shares outstanding if Payday Inc. repurchased shares?
What would be the new shares outstanding if Paycheck Inc. issued a dividend?
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
