Use the Information for the Question(s)below

question 11

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 it is managed efficiently,then the expected market value of Luther's assets is closest to:

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

---

Definitions:

Fear of Flying

An anxiety disorder characterized by an extreme dread of flying in airplanes.

Bipolar Disorder

Bipolar Disorder is a mental health condition characterized by extreme mood swings that include emotional highs (mania or hypomania) and lows (depression).

Carrie Fisher

An American actress and writer best known for her role as Princess Leia in the "Star Wars" series.

Mania

A mental state characterized by excessive excitement, energy, euphoria, impulsivity, and sometimes delusions.