1. Your portfolio is 1,000 shares of Kenney, Inc. The stock currently sells for $64 per share. The company has announced a dividend of $1.15 per share with an ex-dividend date of April 19. Assuming no taxes, how much will your stock be worth on April 19?

2. Wing Nut Corp (WNC) most recent free cash flow (FCF) was $225 million; the FCF is expected to grow at a constant rate of 3%. The rms WACC is 15%, and it has 9 million shares of common stock outstanding. The rm has $100 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the rm has no other non-operating assets. It has $868 million in debt and $60 million in preferred stock.

1. What is the value of operations?
2. Immediately prior to the repurchase, what is the intrinsic value of equity?
3. Immediately prior to the repurchase, what is the intrinsic stock price?
4. How many shares will be repurchased? How many shares will remain after the repurchase?
5. Immediately after the repurchase, what is the intrinsic value of equity? The intrinsic stock price?

3. Bernies Burgers (BB)currently has 420,000 shares of stock outstanding that sell for $94 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

1. BB has a three-for-five reverse stock split?
2. BB has a 8 percent stock dividend?
3. BB has a 30.5 percent stock dividend?
4. BB has a seven-for-four stock split?
5. Determine the new number of shares outstanding in parts (a) through (d).

4. Define the following.

1. Signaling hypothesis; clientele effect
2. Residual distribution model; extra dividend
3. Declaration date; holder-of-record date; ex-dividend date; payment date
4. Dividend reinvestment plan (DRIP)
5. Stock split; stock dividend; stock repurchase