Suppose You Are a Shareholder in Galt Industries Holding 600

question 61

Multiple Choice

Suppose you are a shareholder in Galt industries holding 600 shares,and you disagree with this decision to delever the firm.You can undo the effect of this decision by:

• A)Borrowing $6000 and buying 240 shares of stock
• B)Selling 240 shares of stock and lending $6000
• C)Borrowing $9000 and buying 360 shares of stock
• D)Selling 360 shares of stock and lending $9000

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Definitions:

Long-Run Equilibrium

A state in which all parts of the economy, such as supply and demand, are in balance over a significant period, with no external pressures causing shifts in the market.

Stock Prices

Stock Prices represent the cost of purchasing a share of ownership in a company, reflecting the company's current value as determined by buyers and sellers in the market.

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, given the current level of prices.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, leading to a situation where firms in a competitive market produce output at the lowest possible cost per unit.