Use the Information for the Question(s)below

question 10

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 price per share of Luther's stock after the share repurchase?

• A)$25
• B)$24
• C)$15
• D)$20

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Definitions:

Z-scores

Standard scores that indicate how many standard deviations an element is from the mean, used to compare data points across different scales or distributions.

Standard Normal Distribution

A normal distribution with a mean of zero and a standard deviation of one, used in statistical analysis.

Less Than

A mathematical expression used to compare two values, indicating that one value is smaller than the other.

Z-scores

A numerical metric indicating how a specific value relates to a group's average, measured by the number of standard deviations it differs from this mean.