Micromain Company Has 10,000,000 Shares of Common Stock Authorized and 8,000,000

question 59

Multiple Choice

Micromain Company has 10,000,000 shares of common stock authorized and 8,000,000 shares outstanding,each with a $1.00 par value.The firm's additional paid-in capital account has a balance of $18,000,000.The previous year's retained earnings account was $124,000,000.In the year just ended,Micromain generated net income of $16,000,000 and the firm has a dividend payout ratio of 40 percent.What will Micromain's book value per share be when based on the final year-end balance sheet?

• A) $20.75
• B) $15.00
• C) $15.96
• D) $19.95
• E) $18.75

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Definitions:

Expectancy Theory

A motivational theory suggesting that an individual's behavior is determined by their expected outcomes or rewards.

Interaction

The process by which entities communicate and influence each other's behavior.

Stock Certificates

Physical documents that represent ownership of shares in a corporation, indicating the number of shares owned by the shareholder.

Ownership

The legal right or state of having complete control and possession over property, assets, or items, which includes the ability to use, manage, and dispose of them.