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

question 21

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 ratio
• E) Market value of equity per share

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Definitions:

Genotype

An individual’s genetic makeup.

Phenotype

An individual’s actual characteristics.

Motor Neurons

Specialized neurons that initiate and conduct impulses to muscles and glands, facilitating movement and secretion.

Special Receptors

Specialized cells or nerve endings that respond to changes in the environment by converting stimuli into electrical signals for the nervous system.