Use the Information for the Question(s)below

question 43

Multiple Choice

Use the information for the question(s) below.
Iota Industries is an all-equity firm with 50 million shares outstanding.Iota has $200 million in cash and expects future free cash flows of $75 million per year.Management plans to use the cash to expand the firm's operations,which in turn will increase future free cash flows by 12%.Iota's cost of capital is 10% and assume that capital markets are perfect.
-The value of Iota if they use the $200 million to expand is closest to:

• A)$825 million.
• B)$688 million.
• C)$840 million.
• D)$950 million.

---

Definitions:

Small Business

An enterprise characterized by smaller staff numbers and lower revenue compared to larger corporations, often privately owned and operated.

Entrepreneurship Career Options

The various pathways and opportunities available for individuals pursuing careers in creating, managing, and developing new businesses or ventures.

Managerial Functions

Encompass planning, organizing, leading, and controlling, which are the core responsibilities of managers in an organization.

Managerial Skills

The capabilities and competencies that a manager needs to perform their duties effectively, which include technical, human, and conceptual skills.