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What is the maximum loss per share art will incur

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Reference no: EM132958095

Problem 1: Art purchased 2,500 shares of Delta stock. His purchase represents ten percent ownership in the firm. His shares have increased in value from the $12 a share he originally paid to today's market value of $23 share. Assume Delta goes bankrupt and owes $450,000 more in debts than the firm can pay after liquidating all of its assets. What is the maximum loss per share Art will incur on this investment?

A. $0 a share

B. $12 a share

C. $17.50 a share, computed as ($12 + 23)/2

D. $23 a share

E. $18 share, computed as (10% × $450,000)/2,500 shares

Reference no: EM132958095

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