If a Company's Stock Is Selling for $10 a Share

question 74

Multiple Choice

If a company's stock is selling for $10 a share and it has a thousand shares outstanding, what is the market capitalization of the company?

• A) $10
• B) $100
• C) $1,000
• D) $10,000

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Definitions:

Discount Rate

The discount rate that is employed during discounted cash flow evaluation to ascertain the present valuation of future expected cash flows.

Simple Rate of Return

A financial metric that calculates the gain or loss of an investment over a specific period as a percentage of the investment's initial cost.

Cash Outflows

Payments or expenditures made by a business or individual, resulting in a decrease in cash balance.

Useful Life

The estimated duration of time that an asset is expected to be useful in operations, contributing to the company's income generation.