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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 Omicron uses the entire $50 million to repurchase shares.The number of shares that Omicron will have outstanding following the repurchase is closest to:
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Strategic Business Units; organizational entities within larger companies with their own mission, operations, and responsibilities, often treated as a separate business.
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In the context of the Boston Consulting Group matrix, products or business units with high market share in slow-growing markets.
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A strategic tool used by businesses to help prioritize investments among their portfolio of products or business units based on market growth rate and market share.
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