TJ's Has a Market Value Equal to Its Book Value

question 31

Multiple Choice

TJ's has a market value equal to its book value. Currently, the firm has excess cash of $218,500, other assets of $897,309, and equity of $547,200. The firm has 40,000 shares of stock outstanding and net income of $59,800. Management has decided to spend 15 percent of the excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed?

• A) 47,937
• B) 48,050
• C) 37,604
• D) 35,578
• E) 41,584

---

Definitions:

Good Will

A favorable attitude or disposition towards someone or something, often reflected in a company's value as a non-tangible asset.

Refusing Claims

The act of rejecting or denying a request or demand, especially in contexts of insurance or customer service, based on certain criteria or evidence.

Indirect Approach

A method that is not straightforward, often using suggestions or implications rather than direct statements or actions.

Alternative Solutions

Different approaches or methods to solve a problem or achieve a goal, offering options outside the conventional path.