Question 2
ABC Corp. currently has $12 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current share price is $24.4 and it has 34.8 million shares outstanding. In addition, the market value of the company's debt is $7 million. Assuming perfect markets, what is the dividend per share that ABC will be able to pay with the excess cash? Round your answer to two decimals (do not include the $-symbol in your answer)
Question 3
ABC Corp. currently has $32 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current share price is $18 and it has 28.5 million shares outstanding. In addition, the market value of the company's debt is $14 million. Assuming perfect markets, what will the share price of ABC be after it pays the dividend? Round your answer to two decimals (do not include the $-symbol in your answer)
Question 4
XYZ Corp. currently has $10 million in excess cash that it plans on returning to its shareholders through a share repurchase. XYZ's current share price is $22.2 and it currently has 33.8 million shares outstanding. In addition, the market value of the company's debt is $19 million. Assuming perfect markets, how many shares will XYZ be able to repurchase with the excess cash? Express your answer in millions and round your answer to two decimals.
2) | Excess Cash = $ 12 million |
Current Share Price = $24.4 | |
No. of Shares outstanding = 34.8 Million | |
Dividend per Share = $12 Million / 34.8 Million | |
Dividend per Share = 0.3448 per Share |
3) | Excess Cash = $ 32 million |
Current Share Price = $18 | |
No. of Shares outstanding = 28.5 Million | |
Dividend per Share = $32 Million / 28.5 Million = $1.1228 per Share | |
Assuming Perfect Market, | |
Share Price after payment of Dividend = $ 18 - $ 1.1228 | |
Share Price after payment of Dividend = 16.88 | |
4) | Excess Cash = $ 10 million |
Current Share Price = $22.2 | |
No. of Shares outstanding = 33.8 Million | |
Assuming Perfect Market, | |
No. of Shares that can be repurchased using excess cash = $ 10 Million/ $ 22.2 per Share | |
No. of Shares that can be repurchased using excess cash = 450,450 (or) 0.45045 Million Shares |
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