Use the Information for the Question(s)below

question 37

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.
-Assume that Rockwood is not able to repurchase shares prior to the market becoming aware of the new information regarding Rockwood's true value.If Rockwood repurchases the shares following the release of the new information,then the number of shares outstanding following the repurchase is closest to:

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

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Definitions:

Symptoms

Physical or mental features regarded as indicating a condition or disease.

REM Sleep

A stage of sleep characterized by rapid eye movements, where most dreaming occurs, and which is thought to play a role in memory and learning.

NREM Sleep

A phase of sleep characterized by non-rapid eye movements, during which restorative processes occur in the body and brain.

EEG Activity

A recording of the electrical activity of the brain, typically measured using electrodes placed on the scalp.