Multiple Choice
Use the following information to answer the question(s) below.
Galt Industries has 50 million shares outstanding and a market capitalization of $1.25 billion.It also has $750 million in debt outstanding.Galt Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt.Assume perfect capital markets.
-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.
Correct Answer:

Verified
Correct Answer:
Verified
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