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.

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Definitions:

Salt Water

Water that contains significant amounts of dissolved salts, typically found in oceans and seas.

Freshwater Organism

A living entity that inhabits water bodies with low salt content, such as lakes, rivers, and ponds.

Semipermeable Membrane

A membrane that allows the passage of certain small molecules or ions but blocks others.

Concentration Gradient

A variation in the concentration of a substance across a distance, often leading to the diffusion of substances from an area of higher concentration to an area of lower concentration.