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

question 95

Multiple Choice

Use the following information to answer the question(s) below.
d'Anconia Copper is an all-equity firm with 60 million shares outstanding,which are currently trading at $20 per share.Last month,d'Anconia announced that it will change its capital structure by issuing $300 million in debt.The $200 million raised by this issue,plus another $200 million in cash that d'Anconia already has,will be used to repurchase existing shares of stock.Assume that capital markets are perfect.
-At the conclusion of this transaction,the number of shares that d'Anconia Copper will repurchase is closest to:

• A)5 million.
• B)15 million.
• C)20 million.
• D)40 million.

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Definitions:

Resale Value

The estimated market value of an asset if sold again in the future, often considered for vehicles, electronics, and properties.

Office Furniture

Items intended for use in a work environment, such as desks, chairs, and filing cabinets, to facilitate office operations.

Sum-Of-The-Years-Digits

A depreciation method allocating the cost of an asset over its useful life, with more depreciation in earlier years.

Resale Value

The estimated market value at which an asset or property can be sold in the future.