Mostly Macaroni, a fast growing young food company, made a profit last year. Its payout ratio is less than one. It issued no new shares nor did it buy back any. Hence, at the beginning of this year is:
a) book value is lower, but book value-per-share is higher
b) book value is higher and book value-per-share is higher
c) book value is higher, but book value-per-share is lower
d) book value is lower and book value-per-share is lower
Answer: b) book value is higher and book value-per-share is higher
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