Which of the Following Statements Is True for a Corporation

question 65

Multiple Choice

Which of the following statements is true for a corporation with $1 million market value of equity, $2 million market value of assets, and 1,000 shares of outstanding stock?

• A)market value of liabilities exceeds book value of liabilities.
• B)market value of liabilities equals $1 million.
• C)book value per share equals $1,000.
• D)market value per share equals $2,000.

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Definitions:

Market Valuation

The process of determining the current value of a company or an asset in the marketplace.

Constraints

Conditions or limitations within which a system, process, or project must operate.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and disposal, used in valuing inventory and accounts receivable.