Use the Following Information to Answer the Question(s)below

question 59

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that all capital gains are taxed at a 20% rate,and that the dividend tax rate is 40%.Rearden Metal is currently trading for $40 per share,and is about to pay a $5 special dividend.
-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.

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Definitions:

Organisational Design

The process of shaping an organization's structure, roles, and processes to effectively achieve its goals and adapt to environmental changes.

Technology

Technology encompasses the tools, systems, and processes that are created and used to solve problems or improve efficiency, ranging from simple implements to complex machinery and information systems.

Human Resources

The department within an organization tasked with managing employee-related functions like hiring, training, and benefits.