Omicron technologies will generate free cash flows of 45, Ask an Expert

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Omicron Technologies will generate free cash flows of $45 million per year, in perpetuity, and will pay out these free cash flows as regular dividends. Omicron has no debt. Omicron’s unlevered cost of capital is 10% and there are 10 million shares outstanding. Omicron's board decides use this year’s $45 million in free cash flows to repurchase shares of the firm's stock. The number of shares that Omicron will have outstanding following the repurchase is closest to: A) 8.8 million B) 1.2 million C) 9.0 million D) 8.9 million

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Financial Management, Finance

Category:- Financial Management
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