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:

Objective Procedures

Processes or protocols that are based on factual and unbiased criteria, ensuring fairness and consistency in application.

Redefining Decision

A strategic pivot or change in direction based on new insights or conditions, affecting future actions and policies.