Use the Information for the Question(s)below

question 47

Multiple Choice

Use the information for the question(s) below.
Rockwood Industries has 100 million shares outstanding,a current share price of $25,and no debt.Rockwood's management believes that the shares are underpriced,and that the true value is $30 per share.Rockwood plans to pay $250 million in cash to its shareholders by repurchasing shares.Management expects that very soon new information will come out that will cause investors to revise their opinion of the firm and agree with Rockwood's assessment of the firm's true value.
-If Rockwood is able to repurchase shares prior to the market becoming aware of the new information regarding Rockwood's true value,then the number of shares outstanding following the repurchase is closest to:

• A)92 million.
• B)10 million.
• C)75 million.
• D)90 million.

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Definitions:

Internal Candidates

Employees within an organization who apply for a new or vacant position as part of the internal recruitment process.

Employee Morale

The overall outlook, attitude, satisfaction, and confidence that employees feel towards their work and work environment.

Artificial Requirement

A stipulation for employment that appears essential for the job but actually serves no real purpose and may be used to exclude certain individuals or groups.

Discriminating

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.