The Market Value of a Share of Stock Is Determined

question 106

Multiple Choice

The market value of a share of stock is determined by

• A) dividing total assets by the number of outstanding shares.
• B) stockbrokers' opinions and ratings.
• C) dividing total shareholders' equity by the number of outstanding shares.
• D) what buyers are willing to pay for the shares.
• E) dividing net profit by the number of outstanding shares.

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Definitions:

Asset Account

An account that records entries for tangible or intangible items that hold value for an entity, such as cash, inventory, property, and equipment.

Expense Account

An account that tracks the costs incurred by a company in the process of earning revenue.

Liability Account

An accounting record that captures the amounts owed by a business to others, representing its debts or obligations.

Double-Entry System

An accounting system that records each transaction twice, as debits in one account and credits in another, to ensure the accounting equation remains balanced.