Refer to Exhibit 15

question 35

Multiple Choice

Refer to Exhibit 15.4.Now assume that AJC is considering changing from its original capital structure to a new capital structure with 50% debt and 50% equity.If it makes this change, its resulting market value would be $820, 000.What would be its new stock price per share?

• A) $58
• B) $59
• C) $60
• D) $61
• E) $62

Appreciate the role and impact of price ceilings and price floors.

Identify methods of rationing and their effects on the market.

Examine the effects of changes in production costs and consumer preferences on the market.

Recognize the role of government interventions in the market.

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Definitions:

Peau D'orange

A term describing skin that looks dimpled or puckered, resembling the surface of an orange, commonly associated with inflammatory breast cancer.

Thickened

The condition or process of becoming denser or more compact in structure.

Exaggerated

Describes something that is overstated or made to seem more important or serious than it actually is.

Gambler's Fallacy

The incorrect idea that an increased frequency of an event in a certain period means it will happen less often later on, or the reverse.