Use the Information for the Question(s) Below

question 79

Multiple Choice

Use the information for the question(s) below.
Consider two firms, Firm X and Firm Y, that have identical assets that generate identical cash flows. Firm Y is an all-equity firm, with 1 million shares outstanding that trade for a price of $24 per share. Firm X has 2 million shares outstanding and $12 million in debt at an interest rate of 5%.
-Assume that MM's perfect capital markets conditions are met and that you can borrow and lend at the same 5% rate as Firm X. You have $5,000 of your own money to invest and you plan on buying Firm X stock. Using homemade (un) leverage you invest enough at the risk-free rate so that the payoff of your account will be the same as a $5,000 investment in Firm Y stock. The number of shares of Firm X stock you purchased is closest to ________.

• A) 100
• B) 417
• C) 1,650
• D) 825

Explore the generational differences in ethical perspectives and the implications for leadership.

Assess the global and cultural limitations of current leadership ethics research.

Comprehend the role of followers in ethical leadership, including types of followers and their reactions to ethical and unethical leaders.

Understand the principles of ethical leadership and their historical philosophical origins.

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Definitions:

Sensory Images

Mental representations or impressions formed from the input of the five senses, enabling visualization or a sensory experience in the absence of external stimuli.

Ecstasy

A feeling of intense joy or overwhelming happiness; also refers to a synthetic drug known for producing such feelings.

Dehydration

A state where a body lacks enough fluids, especially water, necessary for normal functioning, leading to various health issues.

THC

The major active ingredient in marijuana; triggers a variety of effects, including mild hallucinations.