Use the Information for the Question(s)below

question 6

Multiple Choice

Use the information for the question(s) below.
Luther Industries has $5 million in excess cash and 1 million shares outstanding.Luther is considering investing the cash in one-year treasury bills that are currently paying 5% interest,and then using the cash to pay a dividend next year.Alternatively,Luther can pay the cash out as a dividend immediately and the shareholders can invest in the treasury bills themselves.Assume that capital markets are perfect.
-If Luther decides to pay the dividend immediately the dividend per share will be closest to:

• A)$1.05.
• B)$5.25.
• C)$5.00.
• D)$4.75.

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Definitions:

Bottom-Up Processing

A type of information processing that begins with sensory input and builds up to the formation of a perception in the brain.

Interpret Sensory

The process of decoding and understanding sensory information received from the environment through the senses.

Neural Information

Data processed by the nervous system, including sensory input, brain activity, and signals that control muscles.

Sensory Systems

The parts of the nervous system involved in the acquisition, processing, and interpretation of sensory information.