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lii lii
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3 years ago
Karkas Cold Cuts Inc. has $20 of cash and analysts expect the company to generate $10 of free cash flow at the end of the current year. The same amount of free cash is expected annually in perpetuity. Karkas is all equity financed and stock holders require a return of 10%. There are 200 shares outstanding. Karkas is considering a cash dividend of $0.10 per share. If it pays the dividend, then what will the stock price be after the dividend?

▸ $0.30

▸ $0.40

▸ $0.50

▸ $0.60
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
Authors:
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rtwyhw4rtwyhw4
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3 years ago
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Thanks for your help!!
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