Assume That in Addition to 1

question 95

Multiple Choice

Assume that in addition to 1.25 billion common shares outstanding,Luther has stock options given to employees valued at $2 billion.After the repurchase,how many shares will Luther have outstanding?

• A)1.0 billion
• B)1.2 billion
• C)0.75 billion
• D)1.1 billion
• E)1.25 billion

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Definitions:

Net Operating Income

Earnings before interest and taxes (EBIT), representing the profit from regular business operations.

Common Fixed Expenses

Costs that do not change with the level of production or sales over a certain period and are shared among different segments or products of a business.

Total Fixed Expenses

Expenses that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

Net Operating Income

The profit a company makes after deducting operating expenses, excluding interest and taxes.