A Firm Has a Market Value Equal to Its Book

question 68

Multiple Choice

A firm has a market value equal to its book value.Currently,the firm has excess cash of £800 and other assets of £5,200.Equity is worth £6,000.The firm has 600 shares outstanding and net income of £700.The firm has decided to spend all of its excess cash on a share repurchase program.How many shares will be outstanding after the share repurchase is completed?

• A)480 shares
• B)500 shares
• C)520 shares
• D)540 shares
• E)560 shares

---

Definitions:

Solve

To find a solution or answer to a problem, especially a mathematical problem or equation.

Equivalent

A term used to describe two expressions or quantities that have the same value or mathematical property.

Equations

Mathematical statements asserting the equality of two expressions, composed of variables and constants.

Equation

An equation is a mathematical statement that asserts the equality of two expressions, typically including one or more variables.