A Firm Has a Market Value Equal to Its Book

question 213

Multiple Choice

A firm has a market value equal to its book value. Currently, the firm has excess cash of $990 and other assets of $10,010. Equity is worth $11,000. The firm has 500 shares of stock outstanding and net income of $2,250. The firm is going to use all of its excess cash to repurchase shares of stock. What will the stock price per share be after the stock repurchase is completed?

• A) $22
• B) $24
• C) $26
• D) $28
• E) $30

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Definitions:

Repeat Button

A user interface element that, when activated, causes an action or event to reoccur or repeat, such as playing a media file again.

Design View

An interface in software applications where users can layout or modify elements without directly interacting with the code.

Form Design View

An environment within software for creating or modifying the visual layout of data entry forms to ensure user-friendly data interaction.

Form Controls

Interactive elements within a form, such as buttons, dropdown lists, checkboxes, and text fields, that collect or display information from the user.