Natsam Corporation has

$ 253$253

million of excess cash. The firm has no debt and

535535

million shares outstanding with a current market price of

$ 11.50$11.50

per share.​ Natsam's board has decided to pay out this cash as a​ one-time dividend.

a. What is the​ ex-dividend price of a share in a perfect capital​ market?

b. If the board instead decided to use the cash to do a​ one-time share​ repurchase, in a perfect capital​ market, what is the price of the shares once the repurchase is​ complete?

c. In a perfect capital​ market, which policy in part

​(a​)

or

​(b​)

makes investors in the firm better​ off?

Question content area bottom

Part 1

a. What is the​ ex-dividend price of a share in a perfect capital​ market?

The​ ex-dividend price is

​$enter your response here

on a per share basis.  ​(Round to the nearest​ cent.)

Part 2

b. If the board instead decided to use the cash to do a​ one-time share​ repurchase, in a perfect capital​ market, what is the price of the shares once the repurchase is​ complete?

The price of the shares once the repurchase is complete is

​$enter your response here

per share.  ​(Round to the nearest​ cent.)

Part 3

c. In a perfect capital​ market, which policy in part

​(a​)

or

​(b​)

makes investors in the firm better​ off?  ​(Select the best choice​ below.)

best answer​ below.)

A.

Investors are better off with policy in part

​(b​).

B.

Investors are better off with policy in part

​(a​).

C.

Investors are indifferent to either policy.