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:

Propositional Reasoning

Involves making inferences and deducing facts from propositions, or statements that declare something to be true or false.

Calibration Curve

A plot of accuracy against confidence judgments. The more the curve approaches a 45-degree line, the better the “calibration” or “fit” between accuracy and confidence.

Participants' Confidence

The level of belief individuals participating in an experiment or study have in their responses or judgments.