A company has positive free cash flow and is considering whether to use the entire amount of that free cash flow to pay a special cash dividend or to repurchase shares at the prevailing market price. Shareholders' wealth under the two options will be equivalent unless the:
A. company's book value per share is less than the prevailing market price.
B. company's book value per share is greater than the prevailing market price.
C. tax consequences and/or information content for each alternative is different.
Answer: C. tax consequences and/ or information content for each alternative is different.
Business
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Maxim Computer has a 10 percent of a $250 billion market. Maxim is the low-cost leader and realizes a 20% margin on sales, and marketing, sales, and administrative expenses equaling 10% of sales. What is Maxim's net marketing contribution?
A) $250 billion B) $25 billion C) $5 billion D) $2.5 billion E) $500 million
Business
List and briefly describe some of the best secondary sources of information
What will be an ideal response?
Business