Use the Information for the Question(s)below

question 2

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.
-With perfect capital markets,what is the market value of Luther's equity after the share repurchase?

• A)$15 billion
• B)$10 billion
• C)$25 billion
• D)$20 billion

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Definitions:

ITQs

Individual Transferable Quotas, a system used in fisheries management that allocates a certain quantity of fish that can be caught by each fisherman or company.

Efficient Use

Utilization of resources in a way that maximizes the output or benefits while minimizing waste, costs, or inefficiencies.

Own Quotas

Quantitative limits assigned to an individual or company regarding the amount of a particular good that can be produced, imported, or acquired, often used for regulation or protectionist purposes.

Overexploited

A condition where natural resources are consumed at a rate faster than they can replenish, leading to depletion or significant ecological damage.