MBA 621 Practice Questions & Answers
Verified 100% Correct
$45 million
Net property, plant, and equipment would fall to $116 million, and total assets and
stockholders' equity would be adjusted accordingly.
Net property, plant, and equipment would rise to $126 million, and total assets and
stockholders' equity would be adjusted accordingly.
Net property, plant, and equipment would fall to $116 million, and total assets
and stockholders' equity would be adjusted accordingly.
Long-term liabilities would rise to $131 million, and total liabilities and stockholders' equity
would be adjusted accordingly.
Long-term liabilities would fall to $111 million, and total liabilities and stockholders'
equity would be adjusted accordingly.
Investors consider that the firm's market value and its book value are roughly equivalent.
The market value of equity is per share price x # of share outstanding:
6.39 x 5 = 31.95 million roughly the same as the book value of equity 32 million
The above diagram shows a balance sheet for a certain company. All quantities shown are
in millions of dollars. If the company has 5 million shares outstanding, and these shares are
trading at a price of $6.39 per share, what does this tell you about how investors view this
firm's book value?
Investors consider that the firm's market value is worth very much less than its book value.
Investors consider that the firm's market value is worth less than its book value.
Investors consider that the firm's market value and its book value are roughly equivalent.
Investors consider that the firm's market value is worth more than its book value.
1.29
, Refer to the balance sheet above. If in 2016 Luther has 10.2 million shares outstanding and
these shares are trading at $16 per share, then Luther's market-to-book ratio would be closest
to ________.
2.58
0.64
1.29
1.80
$385.7 million
EV = MV of Equity + Debt - Cash
MV of Equity = 10.2 x $16 = $163.2
Debt = the sum of short term debt, Current Portion of LT debt and LT
debt = 10.9 + 40.7 + 227 =$ 278.6
So EV = 163.2 + 278.6 - 56.1 = $ 385.7
Refer to the balance sheet above. If in 2016 Luther has 10.2 million shares outstanding
and these shares are trading at $16 per share, then what is Luther's enterprise value? -
$540.0 million
$771.4 million
$385.7 million
$521.4 million
Investors believe the company's assets are not likely to be profitable since its market value is
worth less than its book value.
A public company has a book value of $128 million. They have 20 million shares
outstanding, with a market price of $4 per share. Which of the following statements is true
regarding this company?
Investors may consider this firm to be a growth company.
Investors believe the company's assets are not likely to be profitable since its market value is
worth less than its book value.
Verified 100% Correct
$45 million
Net property, plant, and equipment would fall to $116 million, and total assets and
stockholders' equity would be adjusted accordingly.
Net property, plant, and equipment would rise to $126 million, and total assets and
stockholders' equity would be adjusted accordingly.
Net property, plant, and equipment would fall to $116 million, and total assets
and stockholders' equity would be adjusted accordingly.
Long-term liabilities would rise to $131 million, and total liabilities and stockholders' equity
would be adjusted accordingly.
Long-term liabilities would fall to $111 million, and total liabilities and stockholders'
equity would be adjusted accordingly.
Investors consider that the firm's market value and its book value are roughly equivalent.
The market value of equity is per share price x # of share outstanding:
6.39 x 5 = 31.95 million roughly the same as the book value of equity 32 million
The above diagram shows a balance sheet for a certain company. All quantities shown are
in millions of dollars. If the company has 5 million shares outstanding, and these shares are
trading at a price of $6.39 per share, what does this tell you about how investors view this
firm's book value?
Investors consider that the firm's market value is worth very much less than its book value.
Investors consider that the firm's market value is worth less than its book value.
Investors consider that the firm's market value and its book value are roughly equivalent.
Investors consider that the firm's market value is worth more than its book value.
1.29
, Refer to the balance sheet above. If in 2016 Luther has 10.2 million shares outstanding and
these shares are trading at $16 per share, then Luther's market-to-book ratio would be closest
to ________.
2.58
0.64
1.29
1.80
$385.7 million
EV = MV of Equity + Debt - Cash
MV of Equity = 10.2 x $16 = $163.2
Debt = the sum of short term debt, Current Portion of LT debt and LT
debt = 10.9 + 40.7 + 227 =$ 278.6
So EV = 163.2 + 278.6 - 56.1 = $ 385.7
Refer to the balance sheet above. If in 2016 Luther has 10.2 million shares outstanding
and these shares are trading at $16 per share, then what is Luther's enterprise value? -
$540.0 million
$771.4 million
$385.7 million
$521.4 million
Investors believe the company's assets are not likely to be profitable since its market value is
worth less than its book value.
A public company has a book value of $128 million. They have 20 million shares
outstanding, with a market price of $4 per share. Which of the following statements is true
regarding this company?
Investors may consider this firm to be a growth company.
Investors believe the company's assets are not likely to be profitable since its market value is
worth less than its book value.
