Use the Information for the Question(s)below

question 43

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 its managers increase the risk of the firm,then the expected market value of Luther's assets is closest to:

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

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Americans with Disabilities Act

A civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.

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Insurance policies where the premiums vary based on the assessed risk of insuring a particular individual or entity.

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Situations where legal action is taken or anticipated in response to disputes, controversies, or perceived injustices, often involving litigation or legal proceedings.

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