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:

Customers Served

The number of individual clients or customer accounts that receive goods or services from a business over a specific period.

Flexible Budget

An adaptive financial plan that changes in accordance with variations in volume or activity rates.

Variable Cost Estimates

Projections of costs that change in relation to the level of production or sales volume.

Facility Expenses

Costs associated with the physical maintenance and operation of a business's buildings and equipment.