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Bingel [31]
3 years ago
10

Luther is a successful logistical services firm that currently has $5 billion in cash. Luther has decided to use this cash to re

purchase 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.After the repurchase how many shares will Luther have outstanding?A) 0.75 billionB) 1.0 billionC) 1.1 billionD) 1.2 billion
Business
1 answer:
inysia [295]3 years ago
7 0

Answer:

Total market value of shares = 1.25 billion x $20 = $25 billion

Market value of shares after share repurchase = $25 billion - $5 billion

                                                                                 = $20 billion

No of shares after repurchase = <u>Market value after repurchase</u>

                                                       Market price per share

                                                    = <u>$20 billion</u>

                                                       $20

                                                    = 1 billion shares

The correct answer is B

Explanation:

The total market value of shares is obtained by multiplying the number of shares outstanding by the market price per share. The market value after repurchase is total market value of shares less value of shares repurchased. The number of shares outstanding after repurchase is the market value after repurchase divided by the market price per share.

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Microhard has issued a bond with the following characteristics:
Aleks [24]

Answer:

At Yield to maturity = 11%

Price = $1,000

Explanation:

As for the provided information we have:

Par value = $1,000

Interest each year = $1,000 \times 11% = $110

Effective interest rate semiannually = 11%/2 = 5.5% = 0.055

Since it is paid semiannually, interest for each single payment = $110 \times 0.5 = $55 for each payment.

Time = 8 years, again for this since payments are semi annual, effective duration = 16

Price of the bond = C \times \frac{(1 - \frac{1}{(1+i^n)}) }{i} + \frac{M}{(1 + i)^n}

Here, C = Coupon payment = $55

i = 0.055

n = Time period = 16

M = Maturity value = Par value = $1,000

Therefore, if yield to maturity = 11% then,

P = 55 \times \frac{1 - \frac{1}{(1 + 0.055)^1^6} }{0.55} + \frac{1,000}{(1 + 0.55)^1^6}

= $1,000

7 0
3 years ago
The break even income would be level
Anton [14]
The answer would be 2 (C). As break-even the point at which cost and income are equal and there is neither profit nor loss also : a financial result reflecting neither profit nor loss. break-even.




I hope it helped you!
5 0
3 years ago
A TV manufacturing company uses speakers at the rate of 8000/mo. When it places an order for speakers it incurs a fixed cost of
sveticcg [70]

Solution :

1. Ordering quantity         500      1000      10000     30000        80000

2. No. of orders                 16          8             0.8         0.27            0.1

3. Average inventory        250      500       5000      15000        40000

4. Value of average         2750    5250      50000  142500      370000

   inventory

5. Monthly total cost

a). Cost of material        88000   84000    80000   760000     740000

b). Ordering cost           19200      9600       960          320           120

c). Carrying cost                27.5       52.5       500        1425         3700

Total monthly cost        107227.5 93652.5  81460   77745       77820

Among the total monthly cost, $ 77,745 is the least cost.

Therefore, the optimum order size of quantity = 30,000

The number of orders per month = 8000/30000 = 0.267

Time between two consecutive orders = 30000/8000 = 3.75 months

     

7 0
3 years ago
you are writing a long, complex document in which you need to explain a series of events that led to a problem, evaluate several
hjlf

Answer:

Hi

Explanation:

What organizational pattern would probably be most effective for arranging the main points of a speech with the specific purpose "To inform my audience about three major ways to block junk mail from their e-mail system"? chronological order.

7 0
2 years ago
Suppose that, at an official ticket price of $480, there are 6,000 Justin Timberlake fans wanting to attend his concert, but onl
Nonamiya [84]

Answer:

A. The market clearing price of the tickets is more than $480.

Explanation:

Market-clearing price is a level where the quantity demanded of a product matches or the quantity supplied. At this price, A product or service does not experience any surplus or shortages.  It is the price where the demand curve and the supply curve intersect. The market-clearing price is the same as the equilibrium price.

As the price of $480, the demand for the show is at 6000, but supply is at 4000. There is a surplus in demand. The price of $480 is attractive to more people than supply can handle. Matching supply and demand would require the price to be set above the $480.

6 0
3 years ago
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