A Firm Has $250,000 to Spend on Either a One-Time

question 95

Multiple Choice

A firm has $250,000 to spend on either a one-time special dividend or on a share repurchase program. If the share repurchase is selected, then the firm's:

• A) value will decrease the same as if the dividend option had been selected.
• B) balance sheet will be unaffected and the share price will remain constant.
• C) equity balance will be reduced by less than it would have been under the dividend option.
• D)shareholders will receive less value than under the dividend option.

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