Galt Industries Has 125 Million Shares Outstanding and Has a Marginal

question 8

Multiple Choice

Galt Industries has 125 million shares outstanding and has a marginal corporate tax rate of 35%.Galt announces that it will use $75 million in excess cash to investors repurchase shares.Shareholders had previously assumed that Galt would retain this excess cash permanently.The amount Galt's share price can be expected to change upon this announcement is closest to:

• A) $0.21
• B) $0.24
• C) $0.36
• D) $0.39

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Definitions:

Personality

This refers to the individual differences in characteristic patterns of thinking, feeling, and behaving.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Superego

In psychoanalytic theory, the part of a person's mind that acts as a self-critical conscience, reflecting social standards learned from parents and teachers.

Pleasure Principle

A psychoanalytic concept proposing that individuals seek pleasure and avoid pain in order to satisfy biological and psychological needs.