question archive KMS Corporation has assets with a market value of ?$571?million, ?$47 million of which are cash
KMS Corporation has assets with a market value of ?$571?million, ?$47 million of which are cash
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KMS Corporation has assets with a market value of ?$571?million, ?$47 million of which are cash. It has debt of ?$183?million, and 11 million shares outstanding. Assume perfect capital markets.
a. What is its current stock? price?
b. If KMS distributes ?$47 million as a? dividend, what will its share price be after the dividend is? paid?
c. If? instead, KMS distributes ?$47 million as a share?repurchase, what will its share price be once the shares are?repurchased?
d. What will its new market? debt-equity ratio be after either?transaction?
Option 1
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