Use the Table for the Question(s)below

question 12

Multiple Choice

Use the table for the question(s) below.
-The above diagram shows a balance sheet for a certain company.All quantities shown are in millions of dollars.If the company has 4 million shares outstanding,and these shares are trading at a price of $8.24 per share,what does this tell you about how investors view this firm's book value?

• A)Investors consider that the firm's market value is worth very much less than its book value.
• B)Investors consider that the firm's market value is worth less than its book value.
• C)Investors consider that the firm's market value and its book value are roughly equivalent.
• D)Investors consider that the firm's market value is worth more than its book value.

---

Definitions:

Domestic Inflation

The speed at which the overall price level of goods and services increases, leading to a decrease in the country's purchasing power.

Trade Deficits

A condition in which a nation's expenditures on imported goods and services surpass its earnings from exports, resulting in a trade deficit.

Indebtedness To Foreigners

The total amount of money that a country owes to foreign creditors.

Current Consumption

The purchases of goods and services for immediate use, as opposed to saving or investing for future use.