Suppose That D'Anconia Copper Retained the $200 Million in Cash

question 59

Multiple Choice

Suppose that d'Anconia Copper retained the $200 million in cash so that it would not need to raise new funds from outside investors for an expansion it has planned for next year.If it did raise new funds,it would have to pay issuance fees.Assuming that these fees can be expensed for corporate tax purposed,the amount that d'Anconia Copper needs to save in issuance fees to make retaining the cash beneficial for its investors is closest to:

• A) $2.0 million
• B) $5.5 million
• C) $6.5 million
• D) $7.0 million

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Definitions:

Smooth Muscle

A type of muscle found in the walls of hollow organs like the intestines and blood vessels, functioning involuntarily and controlled by the autonomic nervous system.

Cardiac Muscle

A specialized form of striated muscle found in the heart, characterized by interconnected fibers that contract to pump blood throughout the body.

Skeletal Muscle

A type of striated muscle, which is under voluntary control, functioning to produce movement by contracting.

Dermal Cells

Cells that make up the outer layer of an organism, particularly plants, providing protection against environmental stress, pathogens, and water loss.