Problem

Go back to the first Rational Demiconductor balance sheet one more time. Assume that Rat...

Go back to the first Rational Demiconductor balance sheet one more time. Assume that Rational does not win the lawsuit and is left with only $1 million in surplus cash. Nevertheless Rational decides to pay a cash dividend of $2 per share. What must Rational do to finance the $2 dividend if it holds its debt and investment policies constant? What happens to price per share?

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