Suppose that Rearden Metal made a surprise announcement that it would do a share repurchase rather than pay a special dividend,the net tax savings per share for an investor that would result from this decision is closest to:
A)$1.25
B)$3.75
C)$4.00
D)$5.00

Question

Quizplus · Accepted Answer

A)The effective dividend tax rate is 11ea7cce_3cc1_eb05_928c_738c61d9f47c_TB1626_11 = 11ea7cce_3cc1_eb06_928c_23720a935c62_TB1626_11 = 11ea7cce_3cc2_1217_928c_05e28a41a92c_TB1626_11 = .25 or 25%,so an investor could save $5.00 × 25% = $1.25 per share if Rearden Metal opts to do a repurchase instead of the dividend.

Suppose That Rearden Metal Made a Surprise Announcement That It