Which group will support and why

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Problem 1: Assume perfect capital markets, and consider the following information about city mobile--a leading mobile money service provider in india. City mobile has assets with a market value of Rs. 300 million, Rs. 50 million of which are in cash. It has debt of Rs. 100 million, and 10 million shares outstanding. The top management of City Mobile is divided in their opinion. One group wants to distribute dividends to the shareholders using all cash. The other group prefers share repurchases. Which group will you support and why? You need to show all the calculations to support your answer.

Reference no: EM132917443

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