Use the Information for the Question(s)below

question 90

Multiple Choice

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 Omicron uses the entire $50 million in excess cash to pay a special dividend.The amount of the special dividend is closest to:

• A)$5.00.
• B)$9.00.
• C)$4.00.
• D)$4.50.

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Definitions:

HRM Systems

Human Resource Management Systems; technology-based solutions that assist in managing an organization's human resource functions, such as recruitment, payroll, performance management, and more.

Strategic International HRM

Human resources management issues, functions, policies, and practices that result from the strategic activities of multinational enterprises and that affect the international concerns and goals of those enterprises.

Global Competence

The ability to interact effectively with people from different cultural backgrounds, understanding global issues and possessing skills for functioning in multicultural environments.

Adaptive IHRM

The process of international human resource management practices being adjusted and tailored to fit the cultural and regulatory environments of different countries.