Luther Industries Currently Has 100 Million Shares of Stock Outstanding

question 44

Multiple Choice

Luther Industries currently has 100 million shares of stock outstanding at a price of $25 per share.The company would like to raise money and has announced a rights issue.Every existing shareholder will be sent one right per share of stock that he or she owns.The company plans to require twenty rights to purchase one share at a price of $20 per share.The amount of money that Luther will raise through its rights offering is closest to:

• A)$500 million.
• B)$125 million.
• C)$100 million.
• D)$400 million.

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Definitions:

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Epinephrine

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Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, influencing blood pressure, heart rate, and glucose metabolism.

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A branch of genetics that studies the structure and function of genes at a molecular level, including how genes are transferred from generation to generation.