= = Dividend $5 per share 2.4 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: = = Dividend $4 per share 2.5 Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. Omicron's cum-dividend price is closest to: - = = Enterprise value PV(Future FCF) $400 million = + = + = Market value Enterprise value cash $400 $50 $450 million = = = Share price $45.00 2.6 Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. Omicron's ex-dividend price is closest to: - = = Enterprise value PV(Future FCF) $400 million = + = + = Market value Enterprise value cash $400 $50 $450 million However, once the $50 million in cash is used to pay the dividend, the new market value - = becomes $450 $50 $400 million. = = = Share price $40.00 2.7 Assume that Omicron uses the entire $50 million to repurchase shares. The number of shares that Omicron will repurchase is closest to: - = = Enterprise value PV(Future FCF) $400 million = + = + = Market value Enterprise value cash $400 $50 $450 million = = = Share price $45.00 = = Number of shares repurchased 1,111,111 shares
Dividend = = $5 per share 2.4 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: Dividend = = $4 per share 2.5 Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. Omicron's cum-dividend price is closest to: Enterprise value - PV(Future FCF) = = $400 million Market value = Enterprise value + cash = $400 + $50 = $450 million Share price = = = $45.00 2.6 Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. Omicron's ex-dividend price is closest to: Enterprise value - PV(Future FCF) = = $400 million Market value = Enterprise value + cash = $400 + $50 = $450 million However, once the $50 million in cash is used to pay the dividend, the new market value becomes $450 - $50 = $400 million. Share price = = = $40.00 2.7 Assume that Omicron uses the entire $50 million to repurchase shares. The number of shares that Omicron will repurchase is closest to: Enterprise value - PV(Future FCF) = = $400 million Market value = Enterprise value + cash = $400 + $50 = $450 million Share price = = = $45.00 Number of shares repurchased = = 1,111,111 shares