Solved

Use the Information for the Question(s)below

question 94

Multiple Choice

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.
-Assume that you own 2500 shares of Omicron stock and that Omicron uses the entire $50 million to pay a special dividend.Suppose you are unhappy with Omicron's decision and would prefer that Omicron used the excess cash to repurchase shares.The number of shares that you would have to buy in order to undo the special cash dividend that Omicron paid is closest to:

Definitions:

Learning Organizations

Organizations that actively cultivate, facilitate, and encourage the continuous learning and development of their members to adapt and transform.

Profitable

Generating a financial gain or benefit, typically measured as the difference between revenue and expenses.

Learning Organizations

Companies or entities that prioritize, facilitate, and continuously adapt through the learning of its members, promoting innovation and responsiveness to changing environments.

Learning Organizations

Learning Organizations are companies that facilitate the learning of their members and continuously transform themselves to adapt and innovate in a rapidly changing environment.