Use the Information for the Question(s)below

question 1

Multiple Choice

Use the information for the question(s) below.
Kinston Enterprises has no debt and a debt obligation of $47 million that is due now.The market value of Kinston's assets is $102 million,and the firm has no other liabilities.Assume that capital markets are perfect and that Kinston has 5 million shares outstanding.
-The number of new shares that Kinston must issue to raise the capital needed to pay its debt obligation is closest to:

• A)4.3 million.
• B)4.7 million.
• C)5.0 million.
• D)4.0 million.

---

Definitions:

Effective Yield

The total yield of a financial investment, considering compound interest or reinvestments.

Decimal Places

The amount of digits found following the decimal point in a numerical value.

Experimental Growth Model

A theoretical construct that uses empirical data to model how quantities grow over time, often nonlinearly.

Population

The entire group of individuals or items that is the subject of a statistical study.