Use the Information for the Question(s)below

question 66

Multiple Choice

Use the information for the question(s) below.
Big Blue Banana (BBB) is a clothing retailer with a current share price of $10.00 and with 25 million shares outstanding.Suppose that Big Blue Banana announces plans to lower its corporate taxes by borrowing $100 million and using the proceeds to repurchase shares.
-Assuming perfect capital markets,the share price for BBB after this announcement is closest to:

• A)$11.40.
• B)$10.85.
• C)$10.00.
• D)$8.60.

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Definitions:

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Process

A process involves a series of actions or steps taken in order to achieve a particular end.

Outcome

The result or consequence of an action, experiment, or other proceeding.

Collection

The process of gathering data or items together, often for the purpose of analysis or to make sense of a set of findings.