pose that Payout changes its mind and decides to issue a 5% stock dividend ins rchasing 5% of the outstanding stock. How would this action affect a sharehold vers to the nearest dollar.) . value of the position $ pare the effects of the repurchase to the effects of the cash dividend. value of the position is (Click to select) v under the cash dividend. pare the effects of the repurchase to the effects of repurchasing 5% of the outs ralue of the position is (Click to select) ♥ under the repurchase.
pose that Payout changes its mind and decides to issue a 5% stock dividend ins rchasing 5% of the outstanding stock. How would this action affect a sharehold vers to the nearest dollar.) . value of the position $ pare the effects of the repurchase to the effects of the cash dividend. value of the position is (Click to select) v under the cash dividend. pare the effects of the repurchase to the effects of repurchasing 5% of the outs ralue of the position is (Click to select) ♥ under the repurchase.
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
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there are 25,000 shares of stock
outstanding. The market-value balance sheet for Payout is shown below.
Liabilities and Equity
$1, 000, 000
Assets
Cash
Fixed assets
$150, 000 Equity
850, 000
Suppose that Payout changes its mind and decides to issue a 5% stock dividend instead of either issuing the cash dividend or
repurchasing 5% of the outstanding stock. How would this action affect a shareholder who owns 160 shares of stock? (Round your
answers to the nearest dollar.)
Total value of the position
Compare the effects of the repurchase to the effects of the cash dividend.
The value of the position is (Click to select) v under the cash dividend.
Compare the effects of the repurchase to the effects of repurchasing 5% of the outstanding stock.
The value of the position is: (Click to select) v under the repurchase.
.......................
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