Use the Information for the Question(s)below

question 28

Multiple Choice

Use the information for the question(s) below.
KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt.KD has had consistently stable earnings,and pays a 21% tax rate.Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares.
-After the recapitalization,the total value of KD as a levered firm is closest to:

• A)$470 million.
• B)$730 million.
• C)$642 million.
• D)$530 million.

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Definitions:

Vertebral Foramen

The central opening in each vertebra of the spine through which the spinal cord passes.

Postcentral Gyrus

A ridge on the cerebral cortex located in the parietal lobe, primarily involved in processing somatosensory information like touch and pain.

Temporal Lobe

A region of the cerebral cortex involved in processing auditory information and is also associated with language and memory.

Precentral Gyrus

A prominent gyrus on the surface of the brain's frontal lobe, important for voluntary motor activity.