Question 2 a) The market value balance sheet for AZ airlines is shown here. AZ airlines has declared a 20% stock dividend. The equity goes ex dividend tomorrow (the chronology for a stock dividend is similar to that of a cash dividend). There are 15,000 shares outstanding. What will the ex-dividend price be? Market Value Balance Sheet (m) Cash 1,290,000 Debt 1,682,500 Non-current Assets 5,440,000 Equity 5,047,500 Total 6,730,000 6,730,000 (10 marks) b) Review the reasons why corporations choose to issue dividends when it appears suboptimal from a tax perspective. (7 marks) c) In recent years, share repurchases have become more common than cash dividends. Explain why you think this is using independent research to support your answer. (8 marks) (Total: 25 marks) Question 2 a) The market value balance sheet for AZ airlines is shown here. AZ airlines has declared a 20% stock dividend. The equity goes ex dividend tomorrow (the chronology for a stock dividend is similar to that of a cash dividend). There are 15,000 shares outstanding. What will the ex-dividend price be? Market Value Balance Sheet (m) Cash 1,290,000 Debt 1,682,500 Non-current Assets 5,440,000 Equity 5,047,500 Total 6,730,000 6,730,000 (10 marks) b) Review the reasons why corporations choose to issue dividends when it appears suboptimal from a tax perspective. (7 marks) c) In recent years, share repurchases have become more common than cash dividends. Explain why you think this is using independent research to support your answer. (8 marks) (Total: 25 marks)