The Following Data Apply to Garber Industries, Inc The Company Plans on Distributing $100 as Dividend Payments

question 53

Multiple Choice

The following data apply to Garber Industries, Inc.(GII) : $$\begin{array} { l r } \text { Value of operations } & \$ 1,000 \\\text { Short-term investments } & \$ 100 \\\text { Debt } & \$ 300 \\\text { Number of shares } & 100\end{array}$$ The company plans on distributing $100 as dividend payments.What will the intrinsic per share stock price be immediately after the distribution?

• A) $6.32
• B) $6.65
• C) $7.00
• D) $7.35
• E) $7.72

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Definitions:

Fiscal Policy

Manipulation of the federal budget to attain price stability, relatively full employment, and a satisfactory rate of economic growth.

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Equation of Exchange

An economic equation (MV = PQ) that relates the money supply (M) and its velocity (V) to the price level (P) and quantity of goods sold (Q).

MV = PQ

An equation of exchange in economics that states money supply times the velocity of money equals the price level times the output (quantity of goods and services produced).