Use the Following Information to Answer the Question(s)below

question 97

Multiple Choice

Use the following information to answer the question(s) below.
Galt Industries has 50 million shares outstanding and a market capitalization of $1.25 billion.It also has $750 million in debt outstanding.Galt Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt.Assume perfect capital markets.
-The number of shares that Galt must issue is closest to:

• A)15 million.
• B)25 million.
• C)30 million.
• D)40 million.

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Definitions:

Ending Inventory

Available goods for sale's value at an accounting period's termination.

Periodic Inventory System

An inventory accounting method where updates to inventory levels are made periodically, often at the end of a financial period.

Purchase Returns and Allowances

Transactions where buyers return goods or are granted reductions in the initial selling price due to defects or other issues.

Purchase Discounts

Purchase discounts are reductions in the price paid for merchandise or services due to early payment by the buyer.