Assume That a Firm Had Shareholders' Equity on the Balance

question 21

Multiple Choice

Assume that a firm had shareholders' equity on the balance sheet at a book value of $1,600 at the end of 2010.During 2011 the firm earns net income of $1,300,pays dividends to shareholders of $600,and uses $300 to repurchase common shares.The book value of shareholders' equity at the end of 2011 is:

• A) $2,000
• B) $400
• C) $3,800
• D) $2,600

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Definitions:

Monozygotic Twins

Genetically identical twins that arise from the division of a single fertilized egg; commonly known as identical twins. Compare with dizygotic twins.

Identical Twins

Twins that result from the division of a single fertilized egg, sharing the same genetic material and typically exhibiting very similar physical and sometimes behavioral traits.

Temporary Center

A transient focal point or hub characterized by a particular activity or function, which is not permanent.

Blood Cells

Components of blood, including red cells carrying oxygen, white cells defending against infection, and platelets aiding in clotting.