Use the Following Information to Answer the Question(s)below

question 5

Multiple Choice

Use the following information to answer the question(s) below.
Galt Industries has 50 million shares outstanding and a market capitalization of $1.25 billion.It also has $750 million in debt outstanding.Galt Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt.Assume perfect capital markets.
-Suppose you are a shareholder in Galt industries holding 600 shares,and you disagree with this decision to delever the firm.You can undo the effect of this decision by:

• A)borrowing $6000 and buying 240 shares of stock.
• B)selling 240 shares of stock and lending $6000.
• C)borrowing $9000 and buying 360 shares of stock.
• D)selling 360 shares of stock and lending $9000.

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Definitions:

Tropical Cyclones

Powerful storm systems characterized by a low-pressure center, strong winds, and heavy rain, forming over warm tropical oceans.

Hurricane

A tropical cyclone with wind speeds of 74 miles per hour or greater that occurs especially in the western Atlantic, affecting coastal areas with heavy rain and destructive winds.

Typhoon

A tropical cyclone occurring in the western part of the North Pacific Ocean, characterized by strong winds, heavy rain, and storm surges.

Temperate Rain Forests

Ecosystems located in temperate regions characterized by high rainfall, dense forests, and a diverse range of plant and animal species.