Use the Information for the Question(s)below

question 25

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.
-Including its cash,Omicron's total market value is closest to:

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

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Definitions:

Helmholtz

Refers to Hermann von Helmholtz, a German physicist and physician known for his contributions to the understanding of the conservation of energy and the physiology of vision and hearing.

Taste Buds

Sensory organs on the tongue and other parts of the mouth that are responsible for experiencing taste.

Somesthetic Sense

A group of sensory processes that encompasses touch, temperature, body position, and pain sensations.

System(s)

Systems refer to a group of interacting, interrelated, or interdependent elements forming a complex whole, often used in the context of biological, ecological, or societal structures.