Use the Information for the Question(s)below

question 28

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.
-Assume that Omicron uses the entire $50 million to repurchase shares.The number of shares that Omicron will repurchase is closest to:

• A)1.0 million.
• B)1.2 million.
• C)1.1 million.
• D)0.9 million.

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Definitions:

Ossicle

Small bones, particularly referring to the three bones found in the middle ear: the malleus, incus, and stapes.

Otoscopy

A medical examination technique that involves looking inside the ear using an instrument called an otoscope.

Electronystagmography

A diagnostic test that records involuntary movements of the eye (nystagmus) to assess the vestibular system.

Tympanometry

A test that measures the movement of the eardrum in response to changes in air pressure, used to diagnose issues in the middle ear.