Simpson's Is an All-Equity Firm That Has 400,000 Shares of Stock

question 36

Multiple Choice

Simpson's is an all-equity firm that has 400,000 shares of stock outstanding.The company is in the process of borrowing $1.5 million at 5 percent interest to repurchase 30,000 of the firm's outstanding shares.Ignore taxes.What will be the market value of equity after the repurchase?

• A)$20.0 million
• B)$19.2 million
• C)$18.5 million
• D)$19.8 million
• E)$18.9 million

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Definitions:

Damages in Defamation

Financial compensation awarded to a plaintiff in a defamation lawsuit for harm to reputation caused by false statements.

Special Proof

A requirement or obligation to present a heightened level of evidence in legal proceedings to establish a particular fact or claim.

Defamation Actions

Legal claims brought against individuals or entities for making false statements that cause harm to someone's reputation.

Tort Law Objectives

The aims of tort law, primarily to provide compensation for damages, deter wrongful actions, and restore injured parties to their original state.