Need help with the first part of the question. Think I have the second part corr

Question

Need help with the first part of the question. Think I have the second part correct?

Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Suppose the board decided to do a one-time share repurchase, but you, as an investor, would have preferred to receive a dividend payment. How can you leave yourself in the same position as if the board had elected to make the dividend payment instead? Which of the following is true regarding the effect of a one-time share repurchase on the stock price? (Select the best choice below.) O A. An open-market share repurchase decreases the stock price because the firm's assets decline by the amount of the purchases of the shares. OB. An open-market share repurchase has no effect on the stock price, but the stock price is not the same as the cum-dividend price if a dividend were paid instead O C. An open-market share repurchase increases the stock price due to the decrease in shares in the marketplace OD. An open-market share repurchase has no effect on the stock price To receive your dividend, the percentage of your shares you should sell is 13.33%. (Round to two decimal places.)

Explanation / Answer

Option B is correct. Open market share repurchase does not have any impact on share price. Also share price is not the same as cum dividend price as in the case of dividend.

Percentage of share you should sell= Excess cash/ Toasl shares outstanding= 250/7500=3.33%

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