Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Jumanji Corp. an all equity firm has stock price
currently at $75 and has 4 million share outstanding.
They invested $50 million in T-bills that earn 8%
annually; the after-tax interest payments on the T-
bills are paid to shareholders as a divident. Their tax
rate is 30% and shreholders do not pay tax on any
earnings. They announce that T - bills are to be sold
and the proceeds are to be paid out as a special
divident of $12.50 per share. What will be the price of
the company's stock after the announcement of the
special dividend?
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Transcribed Image Text:Jumanji Corp. an all equity firm has stock price currently at $75 and has 4 million share outstanding. They invested $50 million in T-bills that earn 8% annually; the after-tax interest payments on the T- bills are paid to shareholders as a divident. Their tax rate is 30% and shreholders do not pay tax on any earnings. They announce that T - bills are to be sold and the proceeds are to be paid out as a special divident of $12.50 per share. What will be the price of the company's stock after the announcement of the special dividend?
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