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Rational Demiconductor has at this moment one million shares outstanding and the following market-value balance sheet: Rational Demiconductor Balance Sheet (Market Values, $ millions) Surplus

Rational Demiconductor has at this moment one million shares outstanding and the following market-value balance sheet:

Rational Demiconductor Balance Sheet (Market Values, $ millions)
Surplus cash $ 1.0 $ 0 Debt
Fixed assets and net working capital 10.0 11.0 Equity market capitalization (1 million shares at $11 per share)
$11.0 $11.0

Assume that Rational wins a lawsuit and is paid $1 million in cash. Its market capitalization rises by that amount. It decides to pay out $2 per share instead of $1 per share.

a.

What happens to Rational

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