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

Question 32

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Use the following information to answer the question(s) below.
d'Anconia Copper has $200 million in cash that it can use for a share repurchase.Suppose instead that d'Anconia Copper invests the funds in an account paying 5% interest for one year.Assume that the corporate tax rate is 21%,the individual capital gains rate is 15% and the individual rate on ordinary income is 32%.
-Net of capital gains taxes,the amount the total value of d'Anconia Copper shares increase is closest to:


A) $6.7 million.
B) $6.5 million.
C) $7.0 million.
D) $10.0 million.

Correct Answer:

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