A Public Company Has a Book Value of $128 Million

question 76

Multiple Choice

A public company has a book value of $128 million.They have 20 million shares outstanding,with a market price of $4 per share.Which of the following statements is TRUE regarding this company?

• A)Investors may consider this firm to be a growth company.
• B)Investors believe the company's assets are not likely to be profitable since its market value is worth less than its book value.
• C)The firm's market value is more than its book value.
• D)The value of the firm's assets are greater than their liquidation value.
• E)The firm's market-to-book ratio is greater than 1.

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Definitions:

Holophrase

A single word that is used by infants to express a complex idea, desire, or question, before they start using multi-word sentences.

Private Speech

Self-directed speech that children (and adults) use to guide their own actions and thoughts.

Preferential Looking

A research method used in developmental psychology to understand the preferences of infants, based on the principle that infants will look longer at more interesting stimuli.

Stimulus

An external event or factor that induces a response or reaction in an organism or in a system.