Use the Information for the Question(s)below

question 27

Essay

Use the information for the question(s)below.
Omicron Technologies has $50 million in excess cash and no debt.The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends.Omicron's unlevered cost of capital is 10% and there are 10 million shares outstanding.Omicron's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock.
-Assume that you own 4000 shares of Omicron stock and that Omicron uses the entire $50 million to pay a special dividend.Suppose you are unhappy with Omicron's decision and would have preferred that Omicron used the excess cash to repurchase stock.Detail exactly how you could undo the dividend in a way that will provide you with the same combination of cash and stock that you would have received if Omicron had not paid the special dividend.

Distinguish sentences that assert more than one proposition.

Understand the impact of verb tense, voice, and negation on the meaning of propositions.

Interpret sentences that imply propositions without explicitly stating them.

Analyze the structure and components of compound sentences.

---

Definitions:

Specified Period

A specified period refers to a distinct, predefined duration of time during which certain activities are carried out or certain conditions apply, often detailed in contracts, plans, and schedules.

Incremental Productivity Method

A cost-based sales force sizing approach that compares the cost of adding one salesperson to expected additional sales revenue; the company will keep adding salespeople as long as the revenue exceeds the added cost.

Market Potential

This is an estimate of the maximum total sales of a product or service by all vendors to all potential customers within a specific market segment.

Sales Force Size

The total number of individuals in a company's sales team responsible for selling its products or services.