question archive Natsam Corporation has $250 million of excess cash
Natsam Corporation has $250 million of excess cash
Subject:BusinessPrice:2.87 Bought7
Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Natsam’s board has decided to pay out this cash as a one-time dividend.
What is the ex-dividend price of a share in a perfect capital market?
If the board instead decided to use the cash to do a one-time share repurchase, in a perfect capital market, what is the price of the shares once the repurchase is complete?
In a perfect capital market, which policy in part (a) or (b) makes investors in the firm better off?
Option 1
Low Cost Option
Download this past answer in few clicks
2.87 USD
PURCHASE SOLUTION
Option 2
Custom new solution created by our subject matter experts
GET A QUOTE
rated 5 stars
Purchased 7 times
