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

question 51

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.
-The market capitalization of d'Anconia Copper after this transaction takes place is closest to:

• A)$800 million.
• B)$900 million.
• C)$1100 million.
• D)$1200 million.

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Definitions:

Equity

Fair treatment and distribution of resources, or in finance, the value of an ownership interest in property, including shareholders' equity in a corporation.

Efficiency

The ability to achieve maximum productivity with minimum wasted effort or expense.

Skill Blocks

Modular and progressive units of learning or competency development designed to build upon one's abilities or mastery of specific skills.

Skill-Based Pay

A compensation system where employees are paid based on their skills, expertise, and the complexity of the tasks they can perform, rather than just their job title or position.