Dandelion Fields has a Tobin's Q of .96. The replacement cost of the firm's assets is $225,000 and the market value of the firm's debt is $109,000. The firm has 20,000 shares of stock outstanding and a book value per share of $2.09. What is the market to book ratio?
A)2.56 times
B)3.18 times
C)3.54 times
D)4.01 times
E)4.20 times

Question

Quizplus · Accepted Answer

Market value of assets = .96 F1F1F1S1F1F1F10 $225,000 = $216,000Market value of equity = $216,000 - $109,000 = $107,000Market value per share $107,000/20,000 = $5.35Market-to-book ratio = $5.35/$2.09 = 2.56 times

Dandelion Fields Has a Tobin's Q of