A Firm Has a Market Value Equal to Its Book

question 298

Multiple Choice

A firm has a market value equal to its book value. Currently, the firm has excess cash of $300 and other assets of $8,700. Equity is worth $9,000. The firm has 375 shares of stock outstanding and net income of $800. 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) $1.09
• B) $2.13
• C) $2.67
• D) $3.03
• E) $3.91

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Definitions:

RAM

Random Access Memory, a form of computer memory that can be accessed randomly, used for storing the operating system, applications, and data currently in use for quick access by the device's processor.

Supervisor Program

A system software that controls the execution of other programs and manages system resources.

Authentication

The process of verifying the identity of a person or device, typically based on a username and password or other security measures.

Kernel

The core component of an operating system, managing system resources and facilitating communication between hardware and software.