A Firm Has a Market Value Equal to Its Book

question 81

Multiple Choice

A firm has a market value equal to its book value. Currently, the firm has excess cash of $400 and other assets of $7,600. Equity is worth $8,000. The firm has 200 shares of stock outstanding and net income of $900. 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) $.25
• B) $.45
• C) $2.50
• D) $3.80
• E) $4.50

---

Definitions:

Organizational Creativity

The ability of a company or organization to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating, and entertaining.

Organizational Norms

Established standards of behavior or beliefs that dictate the proper way to act within a specific organization.

Employee's Concern

Refers to the issues, needs, or worries that workers have regarding their job, working environment, or benefits.

Scapegoating

The practice of unfairly blaming an individual or group for problems or adverse outcomes.