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Homework answers / question archive / Orange Corp
Orange Corp. total number of shares is 1 billion and it's current stock price is $90. The company will generate free cash flow of $10 billion for the year ahead, all of which it will payout to its shareholders as a dividend. What would be the price at the ex-dividend date?
a. 80
b. 100
c. 90
d. 70
Dividend Per share = 10 billion / 1 billion
= 10
Ex Dividend Price = Value before - Dividend per share
= 90 - 10
= 80
Option A is correct.
