The Beta Corporation Had 1,000 Shares Outstanding and a Market

question 111

Multiple Choice

The Beta Corporation had 1,000 shares outstanding and a market value of $90,000 prior to the declaration of a $5 per share dividend.To finance a new project they will issue equity and the end result will be that the market value of the firm:

• A)Drops by $1,000
• B)Drops to $85,000
• C)Increases by $1,000
• D)Increases to $95,000 Share price prior to declaration:
• = $90,000/1,000) = $90
• Share price after declaration:
• = $90 - $5 = $85

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Definitions:

Statistical Discrimination

The practice of making decisions about groups of people based on statistical generalizations, rather than individual merit, often leading to unfair outcomes.

Neighborhood Location

The specific area or place within a larger urban or rural setting where a given community resides.

Formal Economy

The sector of the economy that operates within official regulations and is taxed and monitored by a government.

Work Benefit

Advantages or perks provided to employees in addition to their salary, such as health insurance, retirement plans, paid vacation, and professional development opportunities.