A Firm Has 30 Million Shares Outstanding, and Each Share

question 61

Multiple Choice

A firm has 30 million shares outstanding, and each share is traded at $100. Also, each shareholder gets a dividend of $2,000 annually. In this case, the market capitalization is

• A) 30,000 shares, that is, 30 million shares/$100.
• B) $200,000, that is, $2,000 × $100.
• C) $3 billion, that is, 30 million shares × $100.
• D) 20:1, that is, $2,000/$100.

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