A firm has $500 million of assets that includes $50 million of cash and 10 million shares outstanding.The firm uses $50 million of its cash to pay dividends.If an investor has 1000 shares,how many shares must he sell to create a homemade dividend of $6575?

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After the dividend payment, the firm's cash decreases by $50 million, but the value per share remains the same. The investor needs to sell shares to generate $6575. The price per share is $45 ($450 million / 10 million shares). To generate $6575, the investor must sell $6575 / $45 = 146.11 shares, which rounds to 35 shares.

A Firm Has $500 Million of Assets That Includes $50