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Samson Co. has a current cash flow (at time 0 ) of $2.5m and pays...

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Accounting

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Samson Co. has a current cash flow (at time 0 ) of $2.5m and pays no dividends. The present value of the company's future cash flows is $12.5m. The firm is entirely financed with equity and has 500,000 shares outstanding. Assume the dividend tax rate is zero. a. What is the share price of Samson stock? b. Suppose the board of directors of Samson Co. announces its plan to payout 50% of its current cash flow as dividends to its shareholders. How can Marcus Camby, who owns 500 shares of Samson stock, achieve a zero payout policy on his own

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