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

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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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