Use the Information for the Question(s)below

question 58

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.
-After the repurchase how many shares will Luther have outstanding?

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

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Definitions:

Future Transaction Value

The predicted or estimated financial value of a transaction that will occur at a later date, often used in forecasting and budgeting.

Current Market Value

The present value at which an asset can be bought or sold in a current transaction between willing parties.

Realizable Future Value

The expected market value of an asset in the future, considering factors like inflation, interest rates, and market demand.

Marketable Debt

Debt securities that are readily available for purchase and sale in the public market.