Use the Information for the Question(s)below

question 56

Multiple Choice

Use the information for the question(s) below.
Omicron Technologies has $50 million in excess cash and no debt.The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends.Omicron's unlevered cost of capital is 10% and there are 10 million shares outstanding.Omicron's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock.
-Omicron's enterprise value is closest to:

• A)$500 million.
• B)$900 million.
• C)$450 million.
• D)$400 million.

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Definitions:

Battery Drain

The depletion of a battery's charge, often occurring when electrical devices consume power faster than it can be replenished or when the vehicle is not in use.

Key-Off

The state of an automotive electrical system when the ignition key is turned to the off position, cutting power to the engine and most electrical components.

Sulfation Test

A diagnostic procedure used to determine if a lead-acid battery has developed sulfation, a condition that can reduce the battery's performance and lifespan.

Fast Charge

A charging method for batteries that significantly reduces the time required to reach full capacity, commonly used in electric vehicles.