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:

Self-Actualization

The accomplishment or realization of personal capabilities and potentials, seen as an essential desire or compulsion in every person.

Conflict Resolution

The process of resolving a dispute or disagreement between two or more parties in a constructive manner.

Unconditional Positive Regard

According to Carl Rogers, a caring, nonjudgmental attitude of total acceptance toward another person; Rogers believed that this attitude, used in therapy, would help clients develop self-awareness and self-acceptance.

Free Association

A psychoanalytic technique in which a patient says whatever comes to mind without censoring themselves, used to explore unconscious thoughts and feelings.