A Public Company Has a Book Value of $128 Million

question 29

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 is greater than their liquidation value.

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Definitions:

Economic

Pertaining to the production, distribution, and utilization of goods and services, or the financial aspects of a region or society.

Organizational Chart

A diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.

Proposal

A document that offers a solution to a problem or a course of action in response to a need.

Manager

a person responsible for controlling or administering an organization or group of staff.