A Public Company Has a Book Value of $128 Million

question 20

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)The value of the firm's assets is greater than their liquidation value.
• C)The firm's market value is more than its book value.
• D)Investors believe the company's assets are not likely to be profitable as its market value is worth less than its book value.