Foundations Of Finance
Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
Question
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Chapter 13, Problem 15SP

a)

Summary Introduction

To determine: The repurchase price.

b)

Summary Introduction

To determine: The number of shares repurchased.

c)

Summary Introduction

To determine: The impact if repurchase price is set below or above the suggested price..

d)

Summary Introduction

To determine: Whether the firm prefer pay the dividend or repurchase stock.

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The Dunn Corporation is planning to pay dividends of ​$540000. There are 270000 shares​ outstanding, and earnings per share are ​$4. The stock should sell for ​$48 after the​ ex-dividend date.​ If, instead of paying a​ dividend, the firm decides to repurchase​ stock,a. What should be the repurchase​ price? b. How many shares should be​ repurchased? c. What if the repurchase price is set below or above your suggested price in part a​? d. If you own 100​ shares, would you prefer that the company pay the dividend or repurchase​ stock? a. 3/10, net 45 b. 3/15 net 30 c. 3/15 net 60 d.2/10 net 45
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