Which of the Following Statements Is True for a Corporation

question 17

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

Learn how to compute monthly mortgage payments using given interest rates and amortization periods.

Master the concepts of net balance, finance charge, and new balance in credit terms.

Acquire the ability to compute the monthly payments for various loan amounts, interest rates, and terms.

Understand the calculation of monthly interest rates and the effective rate on loans.

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Definitions:

Accounting Equation

A fundamental principle in accounting that states assets equal the sum of liabilities and owner's equity (Assets = Liabilities + Equity).

Net Income

The net income of a business following the subtraction of all costs, such as operating expenses and taxes, from its overall revenue.

Net Loss

The deficit that results when total expenses exceed total revenues in a specific accounting period, indicating a decrease in net assets.

Accounting Equation

A fundamental principle of accounting that states assets are equal to the sum of liabilities and stockholders' equity, expressed as Assets = Liabilities + Stockholders' Equity.