Common Stock in a Business That Was Purchased for $100,000

question 6

Multiple Choice

Common stock in a business that was purchased for $100,000 and has a discounted cash flow value of $340,000 would be worth __________ per share in an efficient market; there are 100,000 shares outstanding.

• A) $2.40
• B) $3.00
• C) $3.40
• D) $1.00

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Definitions:

Theory of Education

The Theory of Education explores the processes and factors influencing learning, teaching, and the overall educational system.

Innate Productivity

The natural or inherent ability of an individual, firm, or country to produce goods and services efficiently.

Above-Equilibrium Wage

A wage rate set above the market equilibrium, where the quantity of labor supplied exceeds the quantity of labor demanded, often leading to unemployment.

Cartel

An association of independent businesses organized to control production, pricing, and marketing of goods to restrict competition.