A fiRm Has a Market Value Equal to Its Book

question 1

Multiple Choice

A firm has a market value equal to its book value.Currently, the firm has excess cash of £400 and other assets of £7,600.Equity is worth £8,000.The firm has 200 shares outstanding and net income
Of £900.The firm has decided to pay out all of its excess cash as a cash dividend.What will the
Earnings per share be after the dividend is paid?

• A)£0.25
• B)£0.45
• C)£2.50
• D)£3.80
• E)£4.50

---

Definitions:

Social Mobility

The movement of individuals, families, or groups within or between social strata in a society, often reflecting changes in occupation, wealth, or status.

Collectivism

Putting group goals ahead of personal goals and defining one’s identity in terms of the groups to which one belongs.

Individualism

Putting personal goals ahead of group goals and defining one’s identity in terms of personal attributes rather than group memberships.

Graduate School

Graduate school is an advanced program of study focused on a particular academic discipline or profession, typically following the completion of an undergraduate degree.