Sin Co. stock sells for $28.00 per share. The total market value of the equity is $40 million. The market-to-book ratio is 7. What is the book value per share?

Question

Quizplus · Accepted Answer

The book value per share can be calculated by dividing the total book value by the number of shares. Given the total market value of the equity is $40 million and the market-to-book ratio is 7, the total book value is $40 million / 7 = $5.71 million. To find the book value per share, we divide the total book value by the number of shares. The number of shares is the total market value divided by the price per share, which is $40 million / $28.00 = 1.42857 million shares. Therefore, the book value per share is $5.71 million / 1.42857 million = $4.00.

Sin Co Stock Sells for $28