Use the Information for the Question(s)below

question 24

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 able to repurchase shares prior to the market becoming aware of the new information regarding Rockwood's true value.After the repurchase,and following the release of the new information regarding the true value of Rockwood,the firm's share price is closest to:

• A)$30.00.
• B)$31.50.
• C)$28.75.
• D)$30.60.

---

Definitions:

Delphi Technique

The soliciting of predictions about specified future events from a panel of experts, using repeated surveys until convergence in opinions occurs.

Internal Supply

The availability of existing employees who can be promoted, transferred, or otherwise moved to fill open positions within an organization.

Markov Analysis

A statistical technique that uses probabilities to predict future states in a system based on its current state, often used for decision making and forecasting.

Human Resources Supply

The availability of potential employees, both within and outside the organization, who possess the skills and qualifications to meet its labor needs.