The CEO of Trans World Airlines (TWA), Jack Frye, wants to distribute

The CEO of Trans World Airlines (TWA), Jack Frye, wants to distribute $1B of cash by issuing a special dividend. Selected financial information for TWA is provided in the table below.

Mr. Frye owns 51% of the common shares of TWA before the extra dividend. What is his total wealth in cash and shares after the special dividend?

Trans World Airlines
Selected Financial Information
Stock Price $62.725
Cash $1,000M
Market Capitalization $9,408.75M
Shares Outstanding 150M
Debt $0

A) $3,800.3M
B) $4,058.4M
C) $4,288.4M
D) $4,798.5M
E) $5,900.7M

ANSWER

D