A Firm Has a Total Market Value of Assets of $240

question 96

Multiple Choice

A firm has a total market value of assets of $240 million, of which $24 million is cash. It has debt of $96 million. If the firm were to repurchase $9.6 million of its stock, what would its new debt-to-equity ratio be?

• A) 142.86%
• B) 71.43%
• C) 35.71%
• D) 85.71%

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Definitions:

Puncta

Small openings located at the inner corner of the eyelids, serving as the entrance to the tear drainage system.

Visual Pathways

The route by which visual signals travel from the eye to the brain for processing and interpretation.

Retina

The light-sensitive layer of tissue at the back of the inner eye, which converts light rays into nerve signals that are sent to the brain to create visual images.

Optic Nerve

A cranial nerve that transmits visual information from the retina to the brain.