Question
Sanedrive Ltd. provides the following snapshot of its financial position in market value terms: Fixed assets = $500,000 Cash = $50,000 Equity = $1,000,000 Number
Sanedrive Ltd. provides the following snapshot of its financial position in market value terms:
Fixed assets = $500,000
Cash = $50,000
Equity = $1,000,000
Number of outstanding shares = 10,000.
Considering this information, which of the following is not correct?
a.
In a world without taxes, the shareholders will be indifferent between a cash dividend or a stock repurchase.
b.
If the firm used $25,000 for a stock repurchase, the stock price will be $100 after the repurchase.
c.
If a dividend of $0.25 per share is declared, the ex-dividend price will be $99.75 per share
d.
In case of a repurchase, the outstanding number of shares will be 9,750
e.
A dividend as low as $0.25 per share indicates a small stock dividend
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