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Omicron Technologies has $90 million in excess cash and no debt. The firm expects to...

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Omicron Technologies has $90 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omicrons unlevered cost of capital is 10% and there are 10 million shares outstanding. Omicron's board is meeting to decide whether to pay out Its $90 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock. Assume that Omicron uses the entire $90 million in excess cash to pay a special dividend. Omicron's ex-dividend price (Hint: ex-dividend price is the price that does not include the current dividend) is closest to: 40 50 5 45

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