Exhibit 716
Use the Information Below for the Following Problem(S)
Based

question 28

Multiple Choice

Exhibit 7.16
Use the Information Below for the Following Problem(S)
Based on the economic outlook for the industry a financial analyst covering Top Choice Corporation has determined the following three possible returns given three different states of the economy over the next period.
$$\begin{array} { c c } \text { Prabability } & \text { Return } \\\hline 0.25 & 0 .02 \\0.50 & 0.14 \\0.25 & 0.30\end{array}$$
-Refer to Exhibit 7.16.What is the expected return for Top Choice Corporation?

• A) 5.2%
• B) 10.4%
• C) 13.7%
• D) 15.0%
• E) 17.6%

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Definitions:

Treasury Stock

Shares that were issued by a company and have been repurchased from the market, but not retired.

Stockholders' Equity

The owners' claim on the company's assets, calculated as the company's total assets minus its total liabilities; also known as shareholders' equity.

Assets

Resources owned or controlled by a business, providing future economic benefits.

Additional Paid-in Capital

The amount of money shareholders have invested in the company above the nominal value of the shares.