The management has plan to use the cash i to restructure


LKT Bhd. is a listed company with 250 million shares outstanding. It has RM500 million in cash and expects future free cash flow of RM100 million per year into perpetuity. The management has plan to use the cash: (i) to restructure the production line and this will increase the future cash flows by 5%; or (ii) to repurchase shares. The cost of capital is 10%. Analyse both options and advise LKT as to which option to be taken.

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Financial Management: The management has plan to use the cash i to restructure
Reference No:- TGS02865457

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