A Firm Has a Market Value Equal to Its Book

question 70

Multiple Choice

A firm has a market value equal to its book value.Currently,the firm has excess cash of $300 and other assets of $6,200.Equity is worth $5,000.The firm has 500 shares of stock outstanding and net income of $720.What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?

• A)$1.44
• B)$.94
• C)$.86
• D)$1.53
• E)$1.71

Recognize the influence of models and observational learning on behavior.

Learn about memory consolidation and effective study strategies including the utilization of mnemonics and the serial-position effect.

Understand memory enhancement techniques and their application.

Comprehend the impact of external influences on memory recall.

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Definitions:

Pareto Optimal

A circumstance in resource distribution where an improvement for one individual correlates with a setback for another.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning their consumption by one individual does not reduce availability to others.

Private Consumption

The total value of all goods and services consumed by individuals and households for personal use.

Pareto Efficient

A resource distribution condition where no reallocation can improve one person's situation without detrimentally affecting another person's situation.