Use the Following Information to Answer the Question(s) Below

question 48

Multiple Choice

Use the following information to answer the question(s) below.
Galt Industries has 50 million shares outstanding and a market capitalization of $1.25 billion. It also has $750 million in debt outstanding. Galt Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt. Assume perfect capital markets.
-Suppose you are a shareholder in Galt industries holding 600 shares,and you disagree with this decision to delever the firm.You can undo the effect of this decision by:

• A) Borrow $6,000 and buy 240 shares of stock
• B) Sell 240 shares of stock and lend $6,000
• C) Borrow $9,000 and buy 360 shares of stock
• D) Sell 360 shares of stock and lend $9,000

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Definitions:

Low-Income Groups

Social and economic classification for individuals or families with significantly lower income levels compared to the average in a society.

Well-Adjusted

Refers to an individual who is mentally and emotionally stable, able to handle stress, and adapt to various social situations effectively.

Defensive Coping

Strategies used to protect oneself from psychological harm through denial, avoidance, or by deflecting difficult emotions or situations.

Religious Commitment

The degree of dedication an individual has towards a particular religion or set of spiritual beliefs, often demonstrated through practices, participation, and adherence to values.