A Firm in the Mining Industry Whose Major Assets Are

question 6

Multiple Choice

A firm in the mining industry whose major assets are cash,equipment,and a closed facility may sell at a premium to the market value of its assets.This premium is most plausibly attributed to:

• A)nearsighted investors.
• B)the low exercise price held by its shareholders.
• C)the option to open the facility when prices rise dramatically.
• D)all of the options.

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Definitions:

Material Misrepresentation

A false statement or omission of fact that significantly affects a party's decision-making in a transaction.

Voidable

A legal term for a contract or transaction that, while valid, may be annulled or rescinded by one of the parties due to certain conditions such as fraud, duress, or mistake.

Mutual Assent

An agreement between two or more parties manifested by an offer and acceptance, which forms the basis of a contract.

Legality

Conformity with the law or adherence to lawful requirements.