One year ago, John Doe bought 10,000 shares of Galaxy Entertainment Company at $50 per share. His purchase represents 20 percent ownership in the firm. Today s market value per share is $60. If Galaxy Entertainment is bankrupt and owes $200,000 more in debts than the firm can pay after liquidating all of its assets, what is the maximum loss per share John Doe will incur on this investment?
a) $0 a share
b) $20 a share
c) $55 a share, computed as ($50 + 60)/2
d) $50 a share
e) $4 share, computed as (20% × $200,000)/10,000 shares