Suppose a firm has $100 million in excess cash. It could
Invest the funds in projects with positive NPVs
Buy another firm
Do all of the options
Pay high dividends to the shareholders
Suppose a firm has $100 million in excess cash. It could:-
c) Do all of the options
Suppose a firm has $100 million in excess cash. It could Invest the funds in projects...
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. Omicrons 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...
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. Omicrons 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...
Suppose that you are deciding which group of projects to invest in. The firm has $200 million it can invest and has the following investment opportunities available. What is highest total NPV you can afford? Project Cost/NPV A 60/75 B 100/120 C 50/50 D 50/70 E 40/30. This is all the information given.
National Business Machine Co. (NBM) has $8 million of extra cash after taxes have been paid. NBM has two choices to make use of this cash. One alternative is to invest the cash in financial assets. The resulting investment income will be paid out as a special dividend at the end of three years. In this case, the firm can invest either in Treasury bills yielding 3 percent or in 5 percent preferred stock. Another alternative is to pay out...
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...
The XYZ Corporation has $50 million in excess cash and no debt. The company expects to generate additional FCFs of $87 million per year in subsequent years. The XYZ Corporation has 25 million outstanding shares and has an unlevered cost of capital of 15 percent. If the firm uses all excess cash to pay a dividend and uses all of the expected future FCFs to pay dividends, what is the cum-dividend price per share of the XYZ Corporation? A. $25.20/share...
The XYZ Corporation has $50 million in excess cash and no debt. The company expects to generate additional FCFs of $87 million per year in subsequent years. The XYZ Corporation has 25 million outstanding shares and has an unlevered cost of capital of 15 percent. If the firm uses all excess cash to pay a dividend and uses all of the expected future FCFs to pay dividends, what is the ex-dividend price per share of the XYZ Corporation? A. 75.25...
Suppose there are no taxes. Firm ABC has no debt, and firm XYZ has debt of $4,000 on which it pays interest of 9% each year. Both companies have identical projects that generate free cash flows of $700 or $1,100 each year. After paying any interest on debt, both companies use all remaining free cash flows to pay dividends each year a. In the table below, fill in the debt payments and equity dividends each firm will receive given each...
Natsam Corporation has $250 million of excess cash. The firm has no debt and $500 million shares outstanding with a current market price of $15 per share. Natsam'sboard has decided to pay out this cash as a one-time dividend. What is the ex-dividend price of a share in a perfect capital market?
Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding, with a current market price of $15 per share. Natsam’s board has decided to pay out this cash as a one-time dividend . a. What is the ex-dividend price of a share in a perfect capital market? b. If the board instead decided to use the cash to do a one-time share repurchase, in a perfect capital market what is the price...