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

question 21

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 have outstanding is closest to:

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

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Definitions:

Truth

The quality or state of being in accord with fact or reality, often sought after in various contexts such as moral, philosophical, or scientific inquiries.

Blinders

Devices used on the sides of horse's eyes to prevent them from seeing to the rear and keep them focused forward.

Stereotypical Beliefs

Widely held but fixed and oversimplified ideas or perceptions of particular types of people or things.

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The faith or convictions regarding the existence, nature, and worship of a deity or deities, and divine involvement in the universe and human life.