Use the information for the question(s)below.
In November 2009,Perrigo Co.(PRGO)had a share price of $39.20.They had 91.33 million shares outstanding,a market-to-book ratio of 3.76.In addition,PRGO had $845.01 million in outstanding debt,$163.82 million in net income,and cash of $257.09 million.
-Perrigo's book value of equity is closest to:
A)$952.16 million.
B)$3580.14 million.
C)$4168.06 million.
D)$4425.15 million.

Question

Quizplus · Accepted Answer

The book value of equity can be calculated as follows:
Book value of equity = Share price × Number of shares outstanding / Market-to-book ratio
Book value of equity = $39.20 × 91.33 million / 3.76
Book value of equity = $952.16 million. Therefore, the closest option is A) $952.16 million.

Use the Information for the Question(s)below