Use the information for the question(s) below.
Omicron Technologies has $50 million in excess cash and no debt.The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends.Omicron's unlevered cost of capital is 10% and there are 10 million shares outstanding.Omicron's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock.
-Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend.The amount of the special dividend is closest to:
A) $5.00.
B) $9.00.
C) $4.00.
D) $4.50.
Correct Answer:
Verified
Q14: Use the following information to answer the
Q15: Use the information for the question(s)below.
Omicron Technologies
Q16: A(n)_ may occur if a major shareholder
Q17: Use the information for the question(s)below.
Omicron Technologies
Q18: Which of the following statements is FALSE?
A)In
Q20: Taggart Transcontinental has announced a $2 dividend.If
Q21: Which of the following statements is FALSE?
A)Unlike
Q22: Use the information for the question(s)below.
Omicron Technologies
Q23: Use the information for the question(s)below.
Omicron Technologies
Q24: Use the information for the question(s)below.
The JRN
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