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:

Leading-Edge Products

Goods or services that represent the most advanced stage of development in their field at the time of release, often incorporating innovative features or technologies.

Unique

Being the only one of its kind; unlike anything else.

Discretionary Resources

Assets or funds over which an individual or organization has the freedom to decide their use without strict limitations.

Knowledge Management

The process of creating, sharing, using, and managing the knowledge and information of an organization.