A firm has current assets of $1.2 million,fixed assets of $3.6 million,and debt of $2.2 million.There are 250,000 shares of stock outstanding.What will be the book value of equity if the firm repurchases 10% of its outstanding shares for $10.40 a share?
A) $2,552,000
B) $2,600,000
C) $2,340,000
D) $2,574,000

Question

Quizplus · Accepted Answer

Equity = $1.2m + 3.6m − 2.2m − (0.10 × 250,000 × $10.40) = $2,340,000

A Firm Has Current Assets of $1