Problem Set 8 Checkpoints

Problem Set 8 Checkpoints - signaling effects no agency...

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BusM 401 Problem Set #8 Payout Policy Checkpoints 1. Do Higgins Chapter 6, #12, assuming that the repurchase would pay out the same total amount of cash as the special dividend. a. 171,429 b. 2. A company wishes to repurchase 1 million shares of its stock, and chooses to do so through a Dutch auction. The chart below shows the number of shares tendered at each price. Given the chart below, what will be the total cost for the company to repurchase all 1 million shares? Price Shares Tendered (thousands) $17.00 100 $17.75 125 $18.50 150 $19.00 175 $19.75 200 $20.00 250 $20.25 325 $20.75 250 3. Assume you are in a simplified world with no market imperfections (i.e., no taxes, no
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Unformatted text preview: signaling effects, no agency problems, no irrational investors, no transaction costs). JKL Corporation has 1,000 shares outstanding currently trading at $100 per share. JKL is considering one of the four options below. What will be the estimated price per share of JKL Corp. stock following each transaction? (Consider each option separately, not in succession.) A cash dividend of $5 per share ______$95 A stock repurchase of $10,000 ______ A two-for-one stock split ______ A 10% stock dividend ______ 2...
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This note was uploaded on 03/06/2012 for the course BUS M 410 taught by Professor Brianboyer during the Fall '10 term at BYU.

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Problem Set 8 Checkpoints - signaling effects no agency...

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