AB Industries is an all-equity firm that has $8 per share in cash and a book value per share of $12. At which one of the following market prices would you know with absolute certainty that the stock was mispriced?

Question

Quizplus · Accepted Answer

If the stock price is $7, it is mispriced because the cash per share alone is $8, meaning the stock is worth at least $8 based on cash holdings alone, not accounting for any other assets or value.

AB Industries Is an All-Equity Firm That Has $8 Per