HyunJi purchased 3000 shares of a company's stock for $7 per share. Her purchase represents a 10% ownership in the firm. The shares have increased in value to today's market value of $23 per share. Assume the company goes bankrupt and owes $870000 more in debts than the firm can pay after liquidating all of its assets. What is the maximum loss per share HyunJi will incur on this investment

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter11: Property Dispositions
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HyunJi purchased 3000 shares of a company's stock for $7 per share. Her purchase represents a 10% ownership in the firm. The shares have increased in value to today's market value of $23 per share. Assume the company goes bankrupt and owes $870000 more in debts than the firm can pay after liquidating all of its assets. What is the maximum loss per share HyunJi will incur on this investment?

Multiple choice

$7 per share

$15 per share, computed as ($7 +23) / 2

$0 per share

$29 per share, computed as (10% x $870000) / 3000 shares

$23 per share

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