Use the Information for the Question(s)below

question 22

Multiple Choice

Use the information for the question(s) below.
Consider two firms,With and Without,that have identical assets that generate identical cash flows.Without is an all-equity firm,with 1 million shares outstanding that trade for a price of $24 per share.With has 2 million shares outstanding and $12 million in debt at an interest rate of 5%.
-Assume that MM's perfect capital market conditions are met and that you can borrow and lend at the same 5% rate as With.You have $5000 of your own money to invest and you plan on buying With stock.Using homemade (un) leverage you invest enough at the risk-free rate so that the payoff of your account will be the same as a $5000 investment in Without stock? The number of shares of With stock you purchased is closest to:

• A)100.
• B)425.
• C)1650.
• D)825.

Understand and apply Monte Carlo simulation in business scenarios.

Analyze inventory and order policies for optimal operations.

Calculate and interpret average times in queueing systems.

Develop random number intervals based on probability distributions.

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Definitions:

Oil Shale

A fine-grained sedimentary rock containing organic matter, known as kerogen, that can be converted into oil through heating.

Oil and Gas

Naturally occurring hydrocarbons found in geological formations beneath the Earth's surface, used as fuel and in chemical production.

Coal

A combustible black or brownish-black sedimentary rock formed from plant remains, primarily consisting of carbon and used as a fossil fuel.

Granitic Intrusion

The forced entry of magma composed mainly of quartz and feldspar into surrounding rock, cooling and solidifying to form granite.