Determine the Net Income of a Comparable Firm Based on the Following

question 1

Multiple Choice

Determine the net income of a comparable firm based on the following information: value of the target firm = $4,000,000; net income of the target firm = $200,000; stock price of the comparable firm = $30; and number of shares of stock outstanding for the comparable firm = 300,000.

• A)$450,000
• B)$500,000
• C)$550,000
• D)$600,000

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Definitions:

Two-Year Period

A span or duration of time lasting exactly 24 months or two calendar years.

Low-Income Cutoffs

Thresholds of income set by statistics agencies, below which a family or individual is considered to be living in poverty.

Community Size

The number of individuals making up a community, influencing its social dynamics, resource availability, and interaction opportunities.

Prevalence Of Low Income

The widespread occurrence or extent of low income levels within a specific population, often indicating socioeconomic challenges.