A Firm with 2,000 Outstanding Shares Selling for $10 Each

question 22

Multiple Choice

A firm with 2,000 outstanding shares selling for $10 each does not have the cash to pay its dividend.In an ideal MM world, how many new shares must be sold and at what price to pay a $2 dividend per share to old shareholders?

• A)sell 2,000 shares at a price of $2 each
• B)sell 667 shares at a price of $6 each
• C)sell 500 shares at a price of $8 each
• D)sell 400 shares at a price of $10 each

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Definitions:

Impoverished Backgrounds

Conditions or environments characterized by a lack of financial, social, and educational resources.

Psychopharmacology

The study of how drugs affect a person's mood, thinking, behavior, and mind, primarily focused on the use of medications for psychiatric disorders.

Anxiety Disorder

A psychological condition identified by intense emotions of anxiety, worry, or fear which significantly disrupt daily life tasks.

Tardive Dyskinesia

A neurological syndrome resulting from long-term use of neuroleptic drugs, characterized by repetitive, involuntary movements.