Maxwell Corp

question 24

Multiple Choice

Maxwell Corp. is coming to the market with a new offering of 450,000 shares of stock at $22 to the public. Maxwell will receive $19 per share. The firm has one million shares outstanding and earnings of $6 million before recording the new issue. What is the amount of earnings per share after the stock issuance?

• A) $2.79
• B) $1.38
• C) $3.21
• D) $6.00

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Definitions:

Culture-Fair Test

A type of psychological test designed to be free of cultural bias, so that it accurately measures intelligence or other attributes across different cultures and ethnic groups.

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Refers to the extent to which a measure is related to an outcome.

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The extent to which a test measures all aspects of the concept it intends to measure.

Test's Reliability

The consistency with which a test measures what it is supposed to measure.