Acme Explosives Inc. is an international producer of creative demolition products. Acme is all equity financed. Acme has too much cash, which it wants to distribute to its shareholders. Selected financial information for Acme is provided in the table. David Wylie is a director at Acme. Next Friday the board is meeting to vote on the format of the distribution. There are three choices on the ballot: 1) an extra dividend of $4 per share; 2) a stock dividend of 0.5 shares for each existing share; or 3) an open market stock repurchase to buy 28.5% of shares outstanding at a price of $14.04. As part of his compensation package, David has options to purchase one million shares at a price of $12 per share. If David's sole concern is his own wealth, then how should he vote at the board meeting?
| Selected Financial Information |
| Cash | $12,600M |
| Market Capitalization | $44,226M |
| Shares Outstanding | 3,150M |
| Stock Price | $14.04 |
| Debt | $0 |
◦ Extra Dividend
◦ Stock Repurchase
◦ Stock Dividend
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