Assume That Omicron Uses the Entire $50 Million in Excess

question 26

Multiple Choice

Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend.The amount of the regular yearly dividends in the future is closest to:

• A)$4.50
• B)$5.00
• C)$4.00
• D)$9.00
• E)$3.00

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Definitions:

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value, to the bondholder.

Par Value

Par value is the nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate; it is a static value and not indicative of market value.

Treasury Bill

Short-term U.S. government debt obligations backed by the Treasury Department with a maturity of less than one year.

Par Value

The face value of a bond or the stock value stated in the corporate charter, often used in legal documents.