Wyatt Oil Has 25 Million Shares Outstanding and Has a Marginal

question 19

Multiple Choice

Wyatt Oil has 25 million shares outstanding and has a marginal corporate tax rate of 40%.Wyatt Oil announces that it will payout $40 million in cash to investors through a special dividend.Shareholders had previously assumed that Wyatt Oil would retain this excess cash permanently.The amount that Wyatt Oil's share price can be expected to change upon this announcement is closest to:

• A)$0.56
• B)$0.64
• C)$0.96
• D)$1.56

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Definitions:

Converted

This refers to changing something from one use, function, or purpose to another, such as converting raw materials into finished goods or converting an industrial building into a residential space.

Sovereign Wealth Fund

State-owned investment funds or entities that manage national savings for the purposes of investment and maintaining the country's wealth.

Private Equity Fund

A type of investment fund that pools money from investors to acquire stakes in private companies with the aim of realizing a profit through future sales or public offerings.

Market Securities

Financial instruments, such as stocks and bonds, that are traded in financial markets.