If the Liquidation Value of a Corporation Exceeds the Market

question 12

Multiple Choice

If the liquidation value of a corporation exceeds the market value of the equity,then the:

• A) firm has no value as a going concern.
• B) firm's stock will sell for book value.
• C) firm is not taking advantage of available growth opportunities.
• D) dividend payout ratio has been too high.

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Definitions:

Poverty

A state or condition in which an individual or community lacks the financial resources and essentials for a minimum standard of living.

Darity And Myers

Refers to William Darity Jr. and Samuel L. Myers, Jr., economists known for their work on racial disparities in economic outcomes.

Economy

The large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated.

Marginal

Refers to the change or difference in an economic variable when altering another variable by a small or marginal amount.