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

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Definitions:

Memory

A component in control systems and computers where data and instructions are stored for processing and retrieval.

Multibit Interfaces

Interfaces designed to handle multiple bits of data simultaneously, allowing for faster data transmission between components.

Group Of Bits

A collection of binary digits (bits) treated as a single unit in digital computing and communications.

Input

Information transmitted from a peripheral device to the input module and then to the data table.