KMS Corporation has assets with a market value of $591 million, $33 million of which...
90.2K
Verified Solution
Link Copied!
Question
Accounting
KMS Corporation has assets with a market value of $591 million, $33 million of which are cash. It has debt of $279 million, and 17 million shares outstanding. Assume perfect capital markets.
a. What is its current stock price?
b. If KMS distributes $33 million as a dividend, what will its share price be after the dividend is paid?
c. If instead, KMS distributes $33 million as a share repurchase, what will its share price be once the shares are repurchased?
d. What will its new market debt-equity ratio be after either transaction?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
