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The firm is an all-equity firm with assets worth $350 million and 100 million shares outstanding....

The firm is an all-equity firm with assets worth $350 million and 100 million shares outstanding. It plans to borrow $100 million and use these funds to repurchase shares. The firm’s marginal corporate tax is 21%, and it plans to keep its outstanding debt equal to $100 million permanently. If the firm manages to repurchase shares at $4 per share, what is the per share value of equity for the leveraged firm?

A) $2.71 per share B) $3.5 per share C) $3.61 per share D) $4 per share E) $3.71 per share 2

The firm declared a dividend of $.62 per share on Thursday, July 16. The dividend will be paid on Tuesday, November 10, to shareholders of record on Friday, October 30. Which one of the following is most likely to be the ex-dividend date?

A) Friday, July 17 B) Thursday, October 29 C) Monday, November 2 D) Tuesday, November 10 E) Wednesday, November 11

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