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Question 13 (2 points) Use the information for the question(s) below. Omicron Technologies has $50 million in excess cash and no debt. The firm expects
Question 13 (2 points) Use the information for the question(s) below. Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omicron's unlevered cost of capital is 8% and there are 10 million shares outstanding. Omicron's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock. Assume that Omicron uses the entire $50 million to repurchase shares. The number of shares that Omicron will repurchase is closest to: 1.2 million 1.5 million 1.0 million 1.1 million 0.9 million
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