Use the Information for the Question(s)below

question 88

Multiple Choice

Use the information for the question(s) below.
KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt.KD has had consistently stable earnings,and pays a 21% tax rate.Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares.
-The value of KD's unlevered equity is closest to:

• A)$600 million.
• B)$470 million.
• C)$390 million.
• D)$400 million.

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Definitions:

Respiratory Bronchiole

Smallest bronchiole (0.5 mm in diameter) that connects the terminal bronchiole to the alveolar duct.

Bronchopulmonary Segments

Divisions of the lung tissues that are anatomically and functionally distinct, each served by its own artery and bronchus.

Hilum

The part of an organ where blood vessels, nerves, and other structures enter or exit.

Simple Squamous Epithelium

A single layer of flat cells that lines surfaces involved in diffusion, osmosis, or filtration, such as blood vessels and air sacs of lungs.