Use the information for the question(s) below.
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.
-Including its cash,Omicron's total market value is closest to:
A) $500 million.
B) $900 million.
C) $400 million.
D) $450 million.
Correct Answer:
Verified
Q10: Use the following information to answer the
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Q13: One method of repurchasing shares is the
Q14: Use the following information to answer the
Q16: A(n)_ may occur if a major shareholder
Q17: Use the information for the question(s)below.
Omicron Technologies
Q18: Which of the following statements is FALSE?
A)In
Q19: Use the information for the question(s)below.
Omicron Technologies
Q20: Taggart Transcontinental has announced a $2 dividend.If
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