What was the change in Global’s book value of equity from 2018 to 2019 according to the data table? Does this imply that the market price of Global’s shares increased in 2019? What was the change in Global‘s book value of equity from 2018-2019? a) Global’s book value of equity changed by $____ million from 2018 to 2019. (Round to one decimal place.) b) does this imply that the market price of Global’s shares increase in 2019? Select all the choices that apply.
What was the change in Global’s book value of equity from 2018 to 2019 according to the data table? Does this imply that the market price of Global’s shares increased in 2019? What was the change in Global‘s book value of equity from 2018-2019? a) Global’s book value of equity changed by $____ million from 2018 to 2019. (Round to one decimal place.) b) does this imply that the market price of Global’s shares increase in 2019? Select all the choices that apply.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What was the change in Global’s book value of equity from 2018 to 2019 according to the data table? Does this imply that the market price of Global’s shares increased in 2019?
What was the change in Global‘s book value of equity from 2018-2019?
a) Global’s book value of equity changed by $____ million from 2018 to 2019. (Round to one decimal place.)
b) does this imply that the market price of Global’s shares increase in 2019? Select all the choices that apply.
Transcribed Image Text:What was the change in Global's book value of equity from 2018 to 2019?
Global's book value of equity changed by $ million from 2018 to 2019. (Round to one decimal place.)
Does this imply that the market price of Global's shares increased in 2019? Explain. (Select all the choices that apply.)
O A. An increase in book value necessarily indicates an increase in Global's share price. The book value of the equity does not go up unless the share price goes up.
O B. There are many events that may affect Global's future profitability, and hence its share price, that do not show up on the balance sheet.
O C. An increase in book value does not necessarily indicate an increase in Global's share price.
O D. The market value of a stock does not depend on the historical cost of the firm's assets, but on investors' expectation of the firm's future performance.
Transcribed Image Text:Data table
- X
Global Corporation Balance Sheet for 2019 and 2018 ($ millions)
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
Notes payable/short-term debt
Assets
2019
2018
2019
2018
Current Assets
Cash
22.3
19.6
28.8
25.7
Accounts receivable
17.9
13.6
6.1
2.4
Inventories
15.2
13.4
Total current liabilities
34.9
28.1
Long-Term Liabilities
Long-term debt
Total long-term liabilities
Total current assets
55.4
46.6
111.7
77.9
Long-Term Assets
Net property, plant, and equipment
Total long-term assets
113.7
80.4
111.7
77.9
113.7
80.4
Total Liabilities
146.6
106.0
Stockholders' Equity
Common stock and paid-in surplus
Retained earnings
Total Stockholders' Equity
Total Liabilities and
Stockholders' Equity
8.2
8.2
14.3
12.8
22.5
21.0
169.1
127.0
169.1
127.0
Total Assets
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