A Firm Has a Market Value Equal to Its Book

question 38

Multiple Choice

A firm has a market value equal to its book value,excess cash of $400,other assets of $9,200,and equity of $9,800.The firm has 500 shares of stock outstanding and net income of $420.The firm has decided to spend all of its excess cash on a share repurchase program.How many shares of stock will be outstanding after the stock repurchase is completed?

• A)440 shares
• B)445 shares
• C)480 shares
• D)910 shares
• E)915 shares

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