Use the Information for the Question(s)below

question 83

Multiple Choice

Use the information for the question(s) below.
Iota Industries is an all-equity firm with 50 million shares outstanding.Iota has $200 million in cash and expects future free cash flows of $75 million per year.Management plans to use the cash to expand the firm's operations,which in turn will increase future free cash flows by 12%.Iota's cost of capital is 10% and assume that capital markets are perfect.
-The price per share of Iota if they use the $200 million to expand is closest to:

• A)$13.75.
• B)$16.50.
• C)$19.00.
• D)$16.80.

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Definitions:

Developing Countries

Nations with a lower level of material well-being and economic development, often characterized by poverty and lower industrialization.

Stimulant

A type of drug that increases activity of the central nervous system, resulting in increased alertness, attention, and energy.

Opioids

Substances, including morphine and heroin, that produce euphoria followed by a tranquil state; in severe intoxication, can lead to unconsciousness, coma, and seizures; can cause withdrawal symptoms of emotional distress, severe nausea, sweating, diarrhea, and fever.

Opioid Intoxication

A state resulting from the use of opioids that includes symptoms like impaired judgment, drowsiness, and often euphoria.