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:

Disparagement

refers to the act of discrediting or belittling someone or something, often in a business context to harm another's economic interests.

Leaflets

Small, printed papers or pamphlets, often used for advertising or informational purposes.

Negligence

Failure to take reasonable care to avoid causing injury or loss to another person.

Breach Of Duty

The failure to perform a legal or moral obligation owed to a person or entity, leading to liability for the breach.