Which of the Following Statements Is True for a Corporation

question 17

Multiple Choice

Which of the following statements is true for a corporation with $1 million market value of equity,$2 million market value of assets,and 1,000 shares of outstanding stock?

• A) Market value of liabilities exceeds book value of liabilities.
• B) Market value of liabilities equals $1 million.
• C) Book value per share equals $1,000.
• D) Market value per share equals $2,000.

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Definitions:

Capital-Intensive

A type of industry or business that requires large amounts of capital investment in comparison to labor to produce goods or services.

Labor-Intensive

A term describing industries or businesses that require a large amount of human labor relative to capital equipment to produce goods or services.

Comparative Advantage

The ability of a country, firm, or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient trade outcomes.

PPCs (Production Possibility Curves)

Graphical representations that show the maximum possible output combinations of two goods that an economy can achieve when all resources are fully and efficiently utilized.