Use the Information for the Question(s)below

question 43

Multiple Choice

Use the information for the question(s) below.
If it is managed efficiently,Luther Industries will have assets with market value of $100 million,$300,million,or $500 million next year,with each outcome being equally likely.Managers may,however,engage in wasteful empire building which will reduce the firm's market value by $20 million in all cases.Managers may also increase the risk of the firm,changing the probability of each outcome to 50%,20%,and 30% respectively.
-If its managers increase the risk of the firm,then the expected market value of Luther's assets is closest to:

• A)$260 million.
• B)$240 million.
• C)$300 million.
• D)$280 million.

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Definitions:

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors.

Princeton University

A prestigious Ivy League university located in Princeton, New Jersey, known for its strong emphasis on undergraduate education and research across various fields.

Seminary Students

Individuals engaged in academic study at a seminary, which is an institution for the training of priests, ministers, or rabbis.

Time Constraints

Limitations or deadlines for completing tasks that can create pressure or stress.