The Balance Sheet for Apple Pie Corp

question 22

Multiple Choice

The balance sheet for Apple Pie Corp.is shown here in market value terms.There are 5,000 shares of stock outstanding. The company has announced that it is going to repurchase $4,350 worth of stock.What will the price of the stock be after this repurchase?

• A)$35.00
• B)$36.19
• C)$39.21
• D)$42.50
• E)$43.33

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Definitions:

Contribution Margin Ratio

The ratio of contribution margin to sales revenue, used to measure the profitability and efficiency of a product or service.

Margin Of Safety

The difference between the actual or expected profitability of a project and the break-even point. It is a cushion against uncertainty.

Net Operating Income

The profit generated from a company's everyday operations, calculated by subtracting operating expenses from operating income.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, indicating the amount contributing to covering fixed costs and generating profit.