Use the Information for the Question(s) Below

question 13

Multiple Choice

Use the information for the question(s) below.
Iota Industries is an all-equity firm with 50 million shares outstanding. Iota has $200 million in cash and expects future free cash flows of $75 million per year. Management plans to use the cash to expand the firm's operations, which in turn will increase future free cash flows by 12%. Iota's cost of capital is 10% and assume that capital markets are perfect.
-The value of Iota if they do not to use the $200 million to expand and hold the cash instead is closest to:

• A) $840 million
• B) $825 million
• C) $950 million
• D) $688 million

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Definitions:

Pharmacy Safety

Practices and protocols that ensure the proper handling, dispensing, and use of medications to avoid errors and harm to patients.

Accreditation Hospitals

Hospitals that have been recognized and certified as meeting certain standards of quality and safety by an accrediting body.

Pathologist

A medical expert who examines tissues, cells, and body fluids to diagnose disease and assist in determining the cause of death in autopsies.

Internist

A doctor who specializes in diagnosing and treating problems related to the internal organs.