Question
1.Which of the following statements is true for a corporation with $5 million market value of equity, $8 million market value of assets, and 10,000
1.Which of the following statements is true for a corporation with $5 million market value of equity, $8 million market value of assets, and 10,000 shares of outstanding stock?
A. Market value of liabilities exceeds market value of assets
B. Market value of liabilities equals $2.5 million
C. Book value per share equals $1,000
D. Market value per share equals $500
2. Which of the following is true regarding a firm with a total debt ratio of 25%? A. Stockholders equity is 3 times the total debt amount B. Stockholders equity is 50% of the assets C. Total assets less total liabilities equals 55% of the assets D. Liabilities are greater than stockholders equity
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