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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 value of KD's levered equity is closest to:
Supplies Cost
The expense incurred to acquire supplies necessary for the production of goods or the operation of a business.
Variable Overhead Efficiency Variance
The difference between the actual variable overhead costs incurred and the expected variable overhead costs based on standard cost accounting practices.
Direct Labor-hours
The whole amount of production time by workers intimately involved in manufacturing.
Variable Manufacturing Overhead
Indirect manufacturing costs that fluctuate with production volume, such as utilities and indirect materials.
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