Kelso's Is Considering Spending $80 000 on Either a Share

question 4

Multiple Choice

Kelso's is considering spending $80 000 on either a share repurchase or an extra cash dividend.Which one of the following values will be the same whether the firm pays a dividend or repurchases shares? Assume there are no taxes or market imperfections.

• A)number of shares outstanding
• B)price-earnings ratio
• C)earnings per share
• D)price per share
• E)market value of equity per share

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Definitions:

Serious Traffic Accident

A vehicular accident that results in significant damage, injuries, or fatalities.

Purchase Price

The amount of money that is paid to acquire a good, service, or asset.

Discharged

Released from a legal obligation, duty, or liability.

Operation of Law

Changes in rights, duties, or obligations automatically enforced by the legal system without the need for action by the parties involved.