Percent of the current cash flows

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Reference no: EM132407334

What is the share price and amount of share purchased given the following information:

A firm has a current period cash flow of 2.1 million and pays no dividend.

The present value of the company's future cash flows is $17.5 million.

The company is entirely financed with equity and there are 500,000 shares outstanding.

Dividend tax rate is 0.

What is the share price of your firm?

The board announce a plan to pay out 50 percent of the current cash flows as a dividend to its shareholders.

How can a shareholder, who owns 1000 shares, achieve a zero pay-out policy on their own?

Reference no: EM132407334

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