Assume that Omicron uses the entire $50 million to repurchase shares.The amount of the regular yearly dividends in the future is closest to:

Question

Quizplus · Accepted Answer

A) Enterprise Value - PV(Future FCF) = 11ea7e5a_6ed0_1bd6_9a0a_450bc4fe9cc7_TB1623_11 = $400 million
Market value = Enterprise Value + cash = $400 + $50 = $450 million
Share price = 11ea7e5a_6ed0_1bd7_9a0a_cd8efca6dfad_TB1623_11 = 11ea7e5a_6ed0_42e8_9a0a_bd5333695e2a_TB1623_11 = $45.00
Number of shares repurchased = 11ea7e5a_6ed0_42e9_9a0a_19b1123b4f91_TB1623_11 = 1,111,111 shares
Shares outstanding = 10 million - 1,111,111 = 8,888,889 shares
Dividend = 11ea7e5a_6ed0_42ea_9a0a_5565253f56b8_TB1623_11 = $4.50 per share

Assume That Omicron Uses the Entire $50 Million to Repurchase