Use the Information for the Question(s)below

question 55

Multiple Choice

Use the information for the question(s) below.
Luther Industries has $5 million in excess cash and 1 million shares outstanding.Luther is considering investing the cash in one-year treasury bills that are currently paying 5% interest,and then using the cash to pay a dividend next year.Alternatively,Luther can pay the cash out as a dividend immediately and the shareholders can invest in the treasury bills themselves.Assume that capital markets are perfect.
-If Luther invests the excess cash in treasury bills,then the dividend per share next year will be closest to:

• A)$5.00.
• B)$5.25.
• C)$4.75.
• D)$1.05.

Calculate the financial outcomes based on accounts receivable and accounts payable periods.

Recognize different forms of short-term financing and their implications for financial planning.

Understand the methods of administration and components of standardized intelligence tests.

Comprehend the different theories of intelligence, including Sternberg's triarchic theory and Spearman's theory.

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Definitions:

Redemption

The process of paying off or buying back something, such as redeeming a bond at maturity or redeeming shares of stock.

Bonds Issued

This term refers to the process where an entity, such as a corporation or government, issues debt securities to raise funds from investors.

Cash Received

The total amount of cash received by a company during a specific period of time, from various sources.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, often used in investment and financial decision-making.