Business, 20.05.2020 11:58 cameron1357

Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omicron’s unlevered cost of capital is 10% and there are 10 million shares outstanding. Omicron’s board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm’s stock. Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. Assume that you own 2,500 shares of Omicron stock. Suppose you are unhappy with Omicron’s decision and would prefer that Omicron used the excess cash to repurchase shares. The number of shares that you would have to buy in order to undo the special cash dividend that Omicron paid is closest to:

Answers: 1

Show answers

Other questions on the subject: Business

Business, 22.06.2019 18:00, dpazmembreno

Carlton industries is considering a new project that they plan to price at $74.00 per unit. the variable costs are estimated at $39.22 per unit and total fixed costs are estimated at $12,085. the initial investment required is $8,000 and the project has an estimated life of 4 years. the firm requires a return of 8 percent. ignore the effect of taxes. what is the degree of operating leverage at the financial break-even level of output?

Answers: 3

continue

Business, 22.06.2019 19:00, lonelynomad00

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.

Answers: 2

continue

Business, 22.06.2019 21:20, fespinoza019

Rediger inc., a manufacturing corporation, has provided the following data for the month of june. the balance in the work in process inventory account was $28,000 at the beginning of the month and $20,000 at the end of the month. during the month, the corporation incurred direct materials cost of $56,200 and direct labor cost of $29,800. the actual manufacturing overhead cost incurred was $53,600. the manufacturing overhead cost applied to work in process was $52,200. the cost of goods manufactured for june was:

Answers: 2

continue

Business, 23.06.2019 00:00, yurybell

Review the key ethical and social issues over the last five decades and place each on the timeline in chronological order. note that once you complete this part of the question, you will be unable to adjust your answers.

Answers: 3

continue

You know the right answer?

Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate additi...