A fiRm Has a Market Value Equal to Its Book

question 5

Multiple Choice

A firm has a market value equal to its book value.Currently, the firm has excess cash of £600 and other assets of £5,400.Equity is worth £6,000.The firm has 500 shares outstanding and net
Income of £900.What will the new earnings per share be if the firm uses its excess cash to
Complete a share repurchase?

• A)£1.20
• B)£1.50
• C)£1.80
• D)£2.00
• E)£2.40

---

Definitions:

Tasks

Specific pieces of work or activities assigned to individuals as part of their job responsibilities.

Job Descriptions

Official documents that detail the duties, responsibilities, required qualifications, and reporting relationships of a specific job.

New Hires

Employees who have recently joined an organization, typically undergoing orientation and initial training phases.

Focus Groups

Small, diverse groups of people whose reactions are studied especially in market research or political analysis through guided discussions.