Ajax Inc of Toronto Has a Market Value Equal to Its

question 169

Multiple Choice

Ajax Inc of Toronto has a market value equal to its book value. Currently, the firm has excess cash of $2,000 and other assets of $13,000. Equity is worth $15,000. The firm has 1,000 shares of stock
Outstanding and net income of $2,500. By what percent does the stock price per share change if
The firm pays out its excess cash as a cash dividend?

• A) -16.67 percent
• B) -13.33 percent
• C) 0.00 percent
• D) 13.33 percent
• E) 16.67 percent

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Definitions:

Photomicrograph

A photograph taken through a microscope to show a magnified image of a sample.

Red Pulp

A tissue in the spleen composed of blood-filled sinuses and splenic cords, involved in filtering blood and removing aged or damaged red blood cells.

White Pulp

Lymphatic tissue in the spleen composed of lymphocytes and macrophages, involved in the immune response.

Germinal Center

An area inside lymph nodes where mature B cells grow, evolve, and alter their antibody genes while responding to an immune challenge.