Use the Information for the Question(s)below

question 25

Multiple Choice

Use the information for the question(s) below.
Omicron Technologies has $50 million in excess cash and no debt.The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends.Omicron's unlevered cost of capital is 10% and there are 10 million shares outstanding.Omicron's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock.
-Including its cash,Omicron's total market value is closest to:

• A)$500 million.
• B)$900 million.
• C)$400 million.
• D)$450 million.

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Definitions:

Interleukin-1 Receptor

A type of protein that binds interleukin-1, playing a crucial role in mediating inflammatory responses.

IgA

An antibody essential to the immune function of mucosal surfaces.

Saliva and Tears

Bodily fluids produced by salivary and lacrimal glands, respectively, playing roles in digestion, oral health, and eye lubrication.

IgD

A class of antibodies that plays a role in the activation of immune cells and is found in small amounts in the blood.