Use the Information for the Question(s)below

question 56

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.
-Omicron's enterprise value is closest to:

• A)$500 million.
• B)$900 million.
• C)$450 million.
• D)$400 million.

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Definitions:

Muscular Layer

A layer of muscle tissue in various organs, including the stomach and intestines, responsible for movement and contractions.

Hepatocyte

A cell of the liver involved in protein synthesis, detoxification, and metabolism of carbohydrates and fats.

Duodenal Mucosa

The innermost layer of the duodenum, containing glands that secrete enzymes and mucus to aid in digestion.

Microvilli

Microscopic cellular membrane protrusions that increase the surface area for absorption or secretion in various epithelial cells.