A Public Company Has a Book Value of $128 Million

question 78

Multiple Choice

A public company has a book value of $128 million.They have 20 million shares outstanding,with a market price of $4 per share.Which of the following statements is true regarding this company?

• A) Investors may consider this firm to be a growth company.
• B) Investors believe the company's assets are not likely to be profitable since its market value is worth less than its book value.
• C) The firm's market value is more than its book value.
• D) The value of the firm's assets are greater than their liquidation value.
• E) The firm's market-to-book ratio is greater than 1.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.