Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2 ABC Corp. currently has $12 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current

Question 2

ABC Corp. currently has $12 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current share price is $24.4 and it has 34.8 million shares outstanding. In addition, the market value of the company's debt is $7 million. Assuming perfect markets, what is the dividend per share that ABC will be able to pay with the excess cash? Round your answer to two decimals (do not include the $-symbol in your answer)

Question 3

ABC Corp. currently has $32 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current share price is $18 and it has 28.5 million shares outstanding. In addition, the market value of the company's debt is $14 million. Assuming perfect markets, what will the share price of ABC be after it pays the dividend? Round your answer to two decimals (do not include the $-symbol in your answer)

Question 4

XYZ Corp. currently has $10 million in excess cash that it plans on returning to its shareholders through a share repurchase. XYZ's current share price is $22.2 and it currently has 33.8 million shares outstanding. In addition, the market value of the company's debt is $19 million. Assuming perfect markets, how many shares will XYZ be able to repurchase with the excess cash? Express your answer in millions and round your answer to two decimals.

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

Intermediate Financial Management

Authors: Eugene F Brigham, Phillip R Daves

14th Edition

0357516664, 978-0357516669

More Books

Students also viewed these Finance questions

Question

What kinds of communication help sustain long-distance romances?

Answered: 1 week ago