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

question 82

Multiple Choice

Use the following information to answer the question(s) below.
Wyatt Oil has assets with a market value of $600 million,$70 million of which are cash.It has debt of $250 million,and 20 million shares outstanding.Assume perfect capital markets.
-If Wyatt Oil distributes the $70 million as a share repurchase,then its debt-to-equity ratio after the share repurchase will be closest to:

• A)0.9.
• B)1.0.
• C)1.1.
• D)1.4.

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Definitions:

Expertise

A high level of knowledge or skill in a particular area or field.

Divisional Structure

An organizational framework where operations are segmented based on products, services, or geographical markets.

Multidomestic Company

A firm that operates in several countries and tailors marketing strategies and product features to each, recognizing the diversity of international markets.

Knowledge Flows

The movement of information, skills, and expertise within and between organizations.