Mesmer Analytic, a Biotechnology Firm, Floated an Initial Public Offering

question 26

Multiple Choice

Mesmer Analytic, a biotechnology firm, floated an initial public offering of 2,000,000 shares at a price of $5.00 per share.The firm's owner/managers held 60 percent of the company's $1.00 par value authorized and issued stock following the public offering.One month after the IPO, the firm's board of directors declared a one-time dividend of $0.50 per share payable to all stockholders, meaning that the owner/managers would receive an immediate dividend, in part out of the pockets of the new public stockholders.What was the book value per share of the firm before and after the special dividend was paid?

• A)$2.60; $2.10
• B)$2.60; $2.60
• C)$2.60; $2.30
• D)$1.60; $1.10
• E)$1.60; $1.00

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Definitions:

Elevators

Mechanical platforms or cabins designed for vertically transporting people or goods between floors within a building.

Arbitrary Inference

involves making a conclusion without supporting evidence, often present in distorted thinking patterns in psychological disorders.

Distorted Thinking

Cognitive processes in which reality is inaccurately perceived, often found in psychological disorders, leading to negative thinking patterns.

Participant Modeling

A therapy technique where a therapist demonstrates a behavior to a client, who is then encouraged to imitate and practice the behavior, often used to overcome anxiety or fears.