SIE practice questionhardMarket Cap
A company’s shares trade at $40. If it repurchases 500,000 of its 10 million outstanding shares, what is its new market capitalization?
- A$380 million✓ Correct answer
- B$400 million
- C$410 million
- D$390 million
Explanation
Why A — $380 million
New shares outstanding: 10M - 0.5M = 9.5M. Market cap = 9.5M x $40 = $380M. Other answers misapply the calculation.
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