What Is the Market Price of a Share of Stock

question 4

Multiple Choice

What is the market price of a share of stock for a firm with 100,000 shares outstanding,a book value of equity of $3,000,000,and a market-to-book ratio of 3?

• A) $10
• B) $30
• C) $90
• D) $105

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Definitions:

Investment Center

A business unit or segment within a larger corporation that is responsible for its own revenue, expenses, and investments, often evaluated on its return on investment.

Return on Assets

Return on Assets (ROA) is a financial ratio that indicates the profitability of a company relative to its total assets.

Profit Center

A segment or branch of a company that is responsible for generating its own revenues and profits, effectively treated as a separate entity for accounting purposes.

Contribution Margin

A financial metric that represents the amount of revenue from sales that exceeds variable costs, contributing towards covering fixed costs and profit.