Use the Information for the Question(s)below

question 26

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 share 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)$24
• B)$15
• C)$25
• D)$20

---

Definitions:

Population Parameter

A numerical characteristic or measure of an entire population, such as a mean (average), variance, or proportion.

Relative Efficiency

A measure comparing the precision or performance of two statistical estimators or methods.

Unbiased

An attribute of an estimator in statistics that means the expected value of the estimator equals the true parameter value it estimates.

Consistent

Referring to an attribute or behavior that is reliable and uniform over time, showing little to no variation.