Use the Following Information to Answer the Question(s)below

question 91

Multiple Choice

Use the following information to answer the question(s) below.
Wyatt Oil has assets with a market value of $600 million,$70 million of which are cash.It has debt of $250 million,and 20 million shares outstanding.Assume perfect capital markets.
-If Wyatt Oil distributes the $70 million as a share repurchase,then its stock price after the share repurchase will be closest to:

• A)$11.00.
• B)$12.50.
• C)$14.00.
• D)$17.50.

---

Definitions:

Unit Product Cost

The total cost associated with producing one unit of a product, including both direct costs and allocated indirect costs.

Machine-Hour

A measure of production output or usage time based on the hours a machine is operated.

Unit Product Cost

The cost assigned to a single unit of product, comprising both variable and fixed manufacturing costs.

Overhead Applied

The amount of manufacturing overhead expenses assigned to a particular job or activity, based on a predetermined rate.