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:

Sleep Terrors

A sleep disorder causing feelings of panic or dread typically occurring during the first hours of stage 3-4 non-REM sleep.

Nightmares

Disturbing dreams that can cause feelings of fear, stress, or anxiety upon waking.

Hypnosis

A state resembling trance characterized by heightened focus and susceptibility to suggestions, commonly employed for therapeutic benefits.

Manifest Content

The precise narrative and thematic substance of a dream as recalled by the person dreaming.