Use the Information for the Question(s)below

question 43

Multiple Choice

Use the information for the question(s) below.
Luther is a successful logistical services firm that currently has $5 billion in cash.Luther has decided to use this cash to repurchase shares from its investors,and has already announced the stock repurchase plan.Currently Luther is an all-equity firm with 1.25 billion shares outstanding.Luther's shares are currently trading at $20 per share.
-The market value of Luther's non-cash assets is closest to:

• A)$20 billion.
• B)$19 billion.
• C)$25 billion.
• D)$24 billion.

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Definitions:

Consumption Spending

The total amount of money that households spend on goods and services within a certain period.

Disposable Income

Income available to households for saving and expenditure post-income tax deductions.

Consumption

The action or process of using goods and services for personal, household, or organizational needs.

Marginal Propensity

The proportion of an additional unit of income that is used for consumption; more specifically referred to as the marginal propensity to consume.