Nunavut Beach Resort Has a Net Income of $330,000 on Sales

question 31

Multiple Choice

Nunavut Beach Resort has a net income of $330,000 on sales of $2,200,000.The firm has total assets of $1,600,000, a book value of shareholders equity of $1,200,000, and a dividend payout ratio of 65%.What is the current market value of their common shares if the required return is 21%?

• A)$1.886 million
• B)$2.067 million
• C)$3.180 million
• D)$8.091 million

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Definitions:

Masterpiece Sculptures

Exceptionally high-quality sculptures that are widely recognized for their artistic, historic, or cultural significance.

Simple Delivery Contract

A contract that is fulfilled by the straightforward delivery of a product or service without the need for complicated procedures or requirements.

Merchant

An individual or business entity engaged in the selling and purchasing of goods or services, often involved in trade at a larger scale.

Destroyed

To damage something so badly that it no longer exists, works, or has value.