Titan Mining recently sold a piece of property for $15 million in cash It wishes to return this money to shareholders and is contemplating either a special dividend or a repurchase of shares Titan has net income of $5 million and 5,000,000 shares outstanding, and its stock trades at a P E multiple ...

Before Distribution Share price 5000000 x 125000000 12share Special Dividend DPS 150000005000000 ...

Titan Mining recently sold a piece of property for $15 million in cash. It wishes to return

Question:

Titan Mining recently sold a piece of property for $15 million in cash. It wishes to return this money to shareholders and is contemplating either a special or a repurchase of shares. Titan has net income of $5 million and 5,000,000 shares outstanding, and its stock trades at a P/E multiple of 12. Show the effect on shareholder wealth if either the special or the repurchase takes place. What effect would each alternative have, if any, on Titan's capital structure? Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...