Which of the Following Is Correct with Respect to the Value

question 71

Multiple Choice

Which of the following is correct with respect to the value of a share of common stock?

• A) The par value is generally the best indicator of the real value of a share of stock.
• B) The market value of a share of stock is determined by objective,financial considerations.
• C) The book value of a share of stock is calculated by dividing shareholders' equity by the current market price of the stock.
• D) A company's market capitalization is determined by multiplying the number of a company's outstanding shares times the market value of each share.
• E) By law,subjective factors like rumours and stockbroker recommendations are not allowed to influence the market price of a share of stock.

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Definitions:

Psychological Needs

Essential emotional or psychological requirements for well-being and proper development, including needs for belonging, esteem, and self-actualization.

Suspend Judgment

Temporarily refraining from making a decision or forming an opinion until all evidence and facts are known.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often resulting in prejudice against other groups.

Enculturation

The process by which people learn the dynamics of their surrounding culture and acquire values and norms appropriate or necessary in that culture.