Given a Book Value Per Share of $5 and a Market

question 45

Multiple Choice

Given a book value per share of $5 and a market value of $12, what is the market value added of a firm with 2,000,000 outstanding shares?

• A) $1,000,000
• B) $10,000,000
• C) $14,000,000
• D) $24,000,000

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Definitions:

Marginal Product

The increase in output resulting from a one-unit increase in the quantity of a particular input, holding other inputs constant.

Isoquants

Isoquants are curves that represent combinations of various inputs that produce the same level of output, used in production theory to analyze input choices.

Input Prices

The cost of resources used in the production of goods and services.

MRTS

Marginal Rate of Technical Substitution, the rate at which one factor must decrease as another increases to keep output constant.