shareholders wealth under the two options will be equivalent unless the:

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A company has positive free cash flow and is considering whether to use the entire amount of that free cash flow to pay a special cash dividend or to repurchase shares at the prevailing market price. shareholders wealth under the two options will be equivalent unless the:

A. company’s book value per share is less than the prevailing market price.

B. company’s book value per share is greater than the prevailing market price.

C. tax consequences and/or information content for each alternative is different.

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