Determine the Net Income of a "Comparable" Firm Based on the Following

question 49

Multiple Choice

Determine the net income of a "comparable" firm based on the following information: value of target firm = $4,000,000; net income of target firm = $200,000; stock price of "comparable" firm = $30.00; and 300,000 shares of stock outstanding for the comparable firm.

• A) $450,000
• B) $500,000
• C) $550,000
• D) $600,000
• E) $700,000

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Definitions:

New Public Management

An administrative approach adopted in public administration that emphasizes efficiency, privatization, and customer service, drawing from private sector management practices.

Free Market Ideas

Economic theories and principles that advocate for minimal government intervention, allowing the forces of supply and demand to dictate market outcomes.

Majority

More than half of a particular group or amount, often referring to the requirement for decision-making in voting contexts.

Represented

To have one’s interests or viewpoints presented or advocated for, especially in contexts like negotiations or decision-making bodies.