Question
The following data apply to Elizabeth's Electrical Equipment (in million): Value of operations is $20 millions; short-term investments is $5 millions; Debt is $5 millions;
The following data apply to Elizabeth's Electrical Equipment (in million): Value of operations is $20 millions; short-term investments is $5 millions; Debt is $5 millions; Number of shares is 0.5 millions.
a. The company plans on distributing $5 million of short-term investments as dividend payments. What will the intrinsic per share stock price be after the distribution?
b. The company plans on distributing $5 million of short-term investments by repurchasing stock. What will the intrinsic per share stock price be after the repurchase?
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Fixed Income Securities Tools For Todays Markets
Authors: Bruce Tuckman, Angel Serrat
4th Edition
1119835550, 978-1119835554
