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.

---

Definitions:

Positive Correlation

A relationship between two variables in which both either increase or decrease together.

Class Assessments

Various methods and tools used by educators to evaluate, measure, and document the academic readiness, learning progress, skill acquisition, or educational needs of students.

Correlated

When two or more variables have a statistical relationship and changes in one variable are associated with changes in another.

Motivated To Learn

A state in which an individual has a strong desire or willingness to acquire knowledge, skills, or understanding.