Cripple Creek Distilleries Inc

question 14

Multiple Choice

Cripple Creek Distilleries Inc.is an all equity company with 20M shares outstanding.It's stock last closed at $20.Cripple Creek has too much cash.The CEO,Levon Helm,wants to distribute the excess cash with an open market stock repurchase.He is contemplating buying back $5M worth of shares at a price of $20.What will the stock price be after completion of the repurchase?

• A) $19.00
• B) $19.25
• C) $19.50
• D) $19.75
• E) $20.00

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Definitions:

Machine-Hours

The total hours that machines are in operation during the production process, used as a basis for allocating manufacturing overhead.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as rent and salaries.

Volume Variance

The difference between the budgeted and actual volume of production, affecting the budgeted levels of costs or revenues.

Budgeted

The process of creating a plan for a company's financial operations, encompassing revenue, expenses, and capital usage.