Use the Information for the Question(s)below

question 83

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 expects the share price to increase from $20 per share to a new share price on announcement of the transaction and before the shares are repurchased,what will the new share price be after the announcement?

• A)$21.40
• B)$22.65
• C)$22.00
• D)$23.50

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Definitions:

PAC Money

Funds collected by Political Action Committees (PACs) that are used to finance election campaigns and influence political legislation.

Business PACs

Political Action Committees that represent business interests, typically raising funds to support candidates or legislation favorable to those interests.

Permanent Campaign

A political environment where the continuous pursuit of electoral victory shapes the conduct of government officials, often blurring the lines between governing and campaigning.

Political Consultants

Professional advisors who help political candidates and parties with campaign strategy, media relations, and public messaging.