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A small biotechnology research corporation has been experiencing losses for the first three years of its existence, and thus has a negative balance in retained
A small biotechnology research corporation has been experiencing losses for the first three years of its existence, and thus has a negative balance in retained earnings. The corporation's stock price, however, is $1 per share. Which of the following statements is most correct? because Select one: a. The corporation's accountants must have made a mistake because retained earnings may not be negative. O b. Investors are irrational to pay $1 per share when earnings per share have been negative for three years. O C. Investors believe the stock is worth $1 per share because future earnings (and cash flows) are expected to be positive. d. The required return on the stock will be small because the company has very few assets
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