Which of the Following Statements Is True for a Corporation

question 76

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)Market value per share equals $1,000
• D)Market value per share equals $2,000

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Definitions:

Market Price

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

Shares

Units of ownership interest or equity in a corporation or financial asset.

Retained Earnings

The portion of a company's profits that is held or retained for reinvestment in the business, rather than being paid out as dividends.

Common Stock

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.