Asked by Maryana Bilska on Apr 29, 2024
Verified
Red Stapler Company has a balance sheet which lists $85 million in assets, $40 million in liabilities, and $45 million in common shareholders' equity. It has 1,400,000 common shares outstanding. The replacement cost of the assets is $115 million. Shares currently sell for $90. What is Red Stapler's market value per share?
A) $1.68
B) $2.60
C) $32.14
D) $60.71
E) None of the options are correct.
Market Value
The current value of an asset or company based on market prices, reflecting what the market is willing to pay for it.
Common Shares
Equity securities that represent ownership interests in a corporation, giving holders voting rights and a share in the company's profits via dividends.
Replacement Cost
The current cost of replacing an asset with a similar one at its current market value.
- Comprehend and utilize the principles of book value and market value per share.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
E
Explanation :
The market value per share is given as $90, which is not among the provided options. This value is directly stated in the question, and none of the calculations based on the given financial figures (assets, liabilities, equity, or replacement cost) are necessary to determine the market value per share.
Learning Objectives
- Comprehend and utilize the principles of book value and market value per share.