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:

Denominator

The bottom number in a fraction used to calculate a rate or ratio, representing the total number or population against which a subset is compared.

Older Adults

Individuals typically aged 65 years and older, often studied in the context of aging, health outcomes, and social conditions.

Diabetes

A metabolic disease characterized by high blood sugar levels over a prolonged period, resulting from defects in insulin secretion, insulin action, or both.

Incidence Rate

The frequency at which new cases of a particular disease occur in a population during a specified period.