If the Liquidation Value of a Corporation Exceeds the Market

question 47

Multiple Choice

If the liquidation value of a corporation exceeds the market value of the equity, then the:

• A)Firm has no value as a going concern
• B)Firm's stock will sell for book value
• C)Firm is not taking advantage of available growth opportunities
• D)Dividend payout ratio has been too high

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Definitions:

Theory of Reasoned Action

A theory that predicts an individual's behavior based on their intention to perform the behavior, which is influenced by their attitudes toward the behavior and normative social pressures.

LaPiere

A researcher known for a study on attitudes versus actions in the context of prejudice and discrimination in the early 20th century.

Theory of Planned Behaviour

A psychological theory that links beliefs and behavior, suggesting that an individual's behavior is determined by their intention to perform the behavior, which is, in turn, influenced by their attitudes, subjective norms, and perceived behavioral control.

Perceived Behavioural Control

An individual's belief about how easy or difficult it will be to perform a particular behavior.