Orange Corp

Finance Dec 25, 2020

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

Expert Solution

Dividend Per share = 10 billion / 1 billion

= 10

Ex Dividend Price = Value before - Dividend per share

= 90 - 10

= 80

Option A is correct.

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