A company is considering either an open market share repurchase or a cash dividend of an equal amount. Compared to the open market share repurchase, the cash dividend is most likely to:
A. Increase a shareholders wealth by a greater amount.
B. Increase a shareholders wealth by a lesser amount.
C. Have a relative impact that depends on the tax treatment of the two alternatives.
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Which of the following is most likely to increase share holders wealth?
A stock dividend.
B. A stock split.
C. A special dividend.
If a companys after-tax borrowing rate is greater than the companys earning yield when the company repurchases stock with borrowed money, going forward, the earnings per share is most likely to:
A. increase.
B. decrease.
C. Remain unchanged.
Business risk is the combination of:
A. Operating risk and financial risk.
B. Sales risk and financial risk.
C. Operating risk and sales risk.
The NPV profiles of two Projects will intersect:
At their internal rates of return
B. If they have different discount rates.
C. At the discount rate that makes their net present values equal