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:

Ecotones

Transition areas between two biomes or ecosystems where species from both areas can interact and various species can thrive.

Island Biogeography

The study of the distribution and dynamics of species on islands, focusing on the factors that affect species richness and extinction rates.

Immigration Rates

The frequency or number of individuals moving into a region or country from another region or country.

Extinction Rates

The speed at which species become extinct over a certain period of time, often accelerated by human activities.