Kelso's Is Considering Spending $80,000 on Either a Stock Repurchase

question 43

Multiple Choice

Kelso's is considering spending $80,000 on either a stock repurchase or an extra cash dividend.Which one of the following values will be the same whether the firm pays a dividend or repurchases stock? Assume there are no taxes or market imperfections.

• A)Number of shares outstanding
• B)Price per share
• C)Earnings per share
• D)Price-earnings (PE) ratio
• E)Market value of equity per share

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Definitions:

Solicited Proposal

A solicited proposal is a document created in response to a request from a potential client or customer, outlining how the sender can meet the specific needs or requirements mentioned in the request.

Unsolicited Proposal

A proposal offered without a specific request, often aiming to pitch an idea or project to a potential client or partner.

Indirect Approach

A communication strategy where the main point or request is gradually introduced, often after providing background information or building a context.

Direct Approach

A straightforward method of dealing with a situation or problem, without avoiding difficult issues.