Solved

Use the Information for the Question(s)below

question 11

Multiple Choice

Use the information for the question(s) below.
Assume that Rose Corporation's (RC) EBIT is not expected to grow in the future and that all earnings are paid out as dividends.RC is currently an all-equity firm.It expects to generate earnings before interest and taxes (EBIT) of $6 million over the next year.Currently RC has 5 million shares outstanding and its stock is trading for a price of $12.00 per share.RC is considering borrowing $12 million at a rate of 6% and using the proceeds to repurchase shares at the current price of $12.00.
-Following the borrowing of $12 million and subsequent share repurchase,the number of shares that RC will have outstanding is closest to:

Definitions:

American-Philippine Conflict

Refers to a period of armed conflict between the United States and Filipino revolutionaries from 1899 to 1902, resulting in the Philippine-American War.

Black Soldiers

African American military members who have served in various capacities and conflicts, often facing racial discrimination.

American Colony

Regions or territories controlled and settled by the United States, especially during the period of expansion and imperial acquisition in the 19th and early 20th centuries.

Philippines

is a Southeast Asian country consisting of more than 7,000 islands, known for its diverse culture, history, and scenic beauty.