Wicker Importers Has Total Assets of $2,860

question 49

Multiple Choice

Wicker Importers has total assets of $2,860. These assets are expected to increase in value to either $2,900 or $3,200 by next year. The company has a pure discount bond outstanding with a face value of $3,000. This bond matures in one year. Currently, Treasury bills are yielding 5 percent. What is the value of the equity in this firm?

• A) $65.40
• B) $133.33
• C) $140.00
• D) $190.48
• E) $200.00

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Definitions:

Psychosexual Stage

Refers to the stages of childhood development in Freudian psychology, each characterized by different modes of obtaining pleasure from the psychosexual energy.

Erogenous

Zones or areas of the body that, when stimulated, produce sexual arousal and pleasure.

Psychodynamic Theory

Freudian theory that unconscious forces determine behavior.

Defense Mechanisms

In psychodynamic theory, unconscious mental strategies that the mind uses to protect itself from distress.