I came across this question: A company issues $200 million in new shares, but it will use $100 million from the proceeds to issue Dividends to shareholders. How does everything change?
The answer states that EqV is up by 100 (200-100). Is it correct, since Equity Value is calculated as a share price x # of shares?
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Yes, but I believe it’s more along the lines of when you’re going from EV, you are adding the 100mm in cash to the EqV, hence why EqV is up 100M.
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