A Firm Has a Market Value Equal to Its Book

question 36

Multiple Choice

A firm has a market value equal to its book value.Currently,the firm has excess cash of $525 and other assets of $9,200.Equity is worth $7,000.The firm has 1,000 shares of stock outstanding and net income of $420.The firm has decided to spend all of its excess cash on a share repurchase program.How many shares of stock will be outstanding after the stock repurchase is completed?

• A)940 shares
• B)945 shares
• C)925 shares
• D)930 shares
• E)935 shares

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Definitions:

Frequency Theory

A theory in hearing that suggests the frequency of the auditory nerve's impulses corresponds to the frequency of a sound wave, affecting the pitch we perceive.

Visual Perception

The capability to understand the immediate surroundings through the analysis of information found in visible light.

Sensory Impressions

Perceptions or feelings resulting from the stimulation of the senses, including sight, sound, smell, touch, and taste.

Middle Ear

The portion of the ear internal to the eardrum, and external to the oval window of the cochlea, containing the three auditory ossicles.