Use the Information for the Question(s)below

question 58

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.
-If KD can repurchase its existing shares at $20 per share,what will the new share price be after the transaction?

• A)$22.35
• B)$22.00
• C)$22.65
• D)$22.10

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Definitions:

Population Growth

The increase in the number of individuals in a population, usually measured as the percentage change at a specific time.

Foreign Aid

Financial or material assistance provided by one country to another, often to support economic development or humanitarian efforts.

International Trade

The exchange (trade) of goods and services across international borders.