What Is the Book Value Per Share for a Firm

question 95

Multiple Choice

What is the book value per share for a firm with 2 million shares outstanding at a price of $50, a market-to-book ratio of .75, and a dividend-payout ratio of 50%?

• A) $33.33
• B) $37.50
• C) $62.50
• D)$66.67

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and variables in the market are at a balance, with no external pressures causing change in the short term.

Economic Profit

A measure of profit that includes all costs, including both the explicit costs of inputs and the implicit costs of capital.

Short-Run Loss

A situation where a firm's total revenues are less than its total costs within a short period, not allowing all factors of production to vary.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and the economy or the firm is fully adjusted to economic conditions, with no excess demand or supply in any market.