Tucker Electronic System's current balance sheet shows total common equity of $3,125,000.The company has 125,000 shares of stock outstanding, and they sell at a price of $52.50 per share.By how much do the firm's market and book values per share differ?
A) $27.50
B) $28.88
C) $30.32
D) $31.83
E) $33.43

Question

Quizplus · Accepted Answer

The book value per share is calculated as total common equity divided by the number of shares outstanding, which is $3,125,000 / 125,000 = $25. The market value per share is given as $52.50. The difference between the market value and book value per share is $52.50 - $25 = $27.50.

Tucker Electronic System's Current Balance Sheet Shows Total Common Equity