Use the Information for the Question(s)below

question 11

Multiple Choice

Use the information for the question(s) below.
If it is managed efficiently,Luther Industries will have assets with market value of $100 million,$300,million,or $500 million next year,with each outcome being equally likely.Managers may,however,engage in wasteful empire building which will reduce the firm's market value by $20 million in all cases.Managers may also increase the risk of the firm,changing the probability of each outcome to 50%,20%,and 30% respectively.
-If it is managed efficiently,then the expected market value of Luther's assets is closest to:

• A)$300 million.
• B)$260.
• C)$240.
• D)$280 million.

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Definitions:

Antidiuretic Hormone

A hormone released by the pituitary gland that signals the kidneys to increase water reabsorption in the blood, thereby controlling the water balance in the body.

Potassium Secretion

The process by which cells actively transport potassium ions out of the cell or into the extracellular fluid or lumen of an organ.

Infundibulum

A funnel-shaped structure, often referring to parts of the brain (pituitary stalk) or reproductive system (oviduct entrance) in humans.

Hypothalamus

The hypothalamus is a region of the brain that plays a crucial role in hormone regulation, temperature control, hunger, thirst, and circadian rhythms.