The Common Stock of Gillen Entertainment Is Selling for $78

question 54

Multiple Choice

The common stock of Gillen Entertainment is selling for $78 a share. The par value per share is $1. Currently, the firm has a total market value of $936,000. How many shares of stock will be outstanding if the firm does a 5-for-2 stock split?

• A)4,800 shares
• B)9,600 shares
• C)15,000 shares
• D)30,000 shares
• E)32,200 shares

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Definitions:

Poor Economy

A situation characterized by low economic activity, high unemployment, and declining market conditions.

Expected Return

The anticipated amount of profit or loss an investment generates, based on projections or historical data.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, commonly used in finance to assess the volatility of investment returns.

Security Market Line

A representation in the Capital Asset Pricing Model (CAPM) that displays the relationship between the expected return of an investment and its risk.