Galt Industries Has 125 Million Shares Outstanding and Has a Marginal

question 8

Multiple Choice

Galt Industries has 125 million shares outstanding and has a marginal corporate tax rate of 35%.Galt announces that it will use $75 million in excess cash to investors repurchase shares.Shareholders had previously assumed that Galt would retain this excess cash permanently.The amount Galt's share price can be expected to change upon this announcement is closest to:

• A) $0.21
• B) $0.24
• C) $0.36
• D) $0.39