Share repurchases have a tax advantage over

dividends in Australia because

Orchid Biotech

Corporation is evaluating several development projects for experimental drugs.

Although the cash flows are difficult to forecast, the company has come up with

the following estimates of the initial capital requirements and NPVs for the

projects. Given a wide variety of staffing needs, the company has also

estimated the number of research scientists required for each development

project. (All cost values are given in millions of dollars.)

a.     

Suppose

that Orchid has a total capital budget of $60 million. Which projects should Orchid choose?

A firm has $300 million of assets that includes

$50 million of cash and 10 million shares outstanding. If the firm uses $30 million of its cash to

repurchase shares, what is the new price per share?

Suppose a firm does not pay a dividend but repurchases

shares using $20 million of cash. The market

value of the firm decreases by

Anyone who purchases the stock on or after the

________ date will not receive the dividend.

A firm may announce its intention to buy its own

shares in the open market like any other investor, also known as a/an