Bakersfield Industries Has a Market Value Equal to Its Book

question 3

Multiple Choice

Bakersfield Industries has a market value equal to its book value. Currently, the firm has excess cash of $750 and other assets of $19,400. Equity is worth $11,500. Bakersfield has 450 shares of stock outstanding and net income of $630. The firm has decided to pay out all of its excess cash as a cash dividend. What will the earnings per share be after the dividend is paid?

• A) -$.27
• B) $0.00
• C) $.73
• D) $1.01
• E) $1.40

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Definitions:

Price Point

The standard price or price range of a product as determined by its perceived market value and competitive conditions.

Units Sold

The quantity of products or services sold within a specific period.

Price Increases

The act of raising the cost of products or services, often in response to increased production costs or to leverage market demand.

Prescription Drugs

Medicines that can only be sold to consumers possessing a valid prescription from a healthcare professional.