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Use the information for the question(s) below. Technology Corporation has 550 million in excess cash and no debt. The firm expects to generate additional free
Use the information for the question(s) below. Technology Corporation has 550 million in excess cash and no debt. The firm expects to generate additional free cash flows af $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Technology Corporation unlevered cost of capital is 10% and there are 10 million shares outstanding. Technology Corporation's boxard is meeting to decide whether to pay out its 550 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock. Assume that Technology Corporation uses the entire 550 million in excess cash to pay a special dividend. The amount of the regular yearly dividends in the future is dosest to O a $4.00 ob $9.00 OG 55.00 Od $4.50 A Sport Store is preparing to pay its quarterly dividend af 52.20 a share this quarter. The stock deed at $67.70 a share today. What will the ex-dividend stock price be if the relevant tax rate is 15 percent and all else is held constant? O a S55.94 Ob $55.63 OC. $55.50 Od $55.26
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