A Firm Has a Market Value Equal to Its Book

question 4

Multiple Choice

A firm has a market value equal to its book value.Currently,the firm has excess cash of £500 and other assets of £9,500.Equity is worth £10,000.The firm has 250 shares outstanding and net income of £1,400.What will the share price be if the firm pays out its excess cash as a cash dividend?

• A)£36
• B)£38
• C)£40
• D)£42
• E)£44

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Definitions:

Heart Rate Monitor

A device used to continuously measure and display the number of heartbeats per minute.

Graphing Calculators

Hand-held calculators capable of plotting graphs, solving simultaneous equations, and performing other tasks beyond basic arithmetic.

Produce and Sell

Refers to the process of manufacturing or creating goods and services and then offering them to buyers in a market.

Heart Rate Monitors

Devices used to measure and record the heart rate, often used in fitness and medical applications to track cardiovascular health.