Given the following information, calculate the market price per share of WAM Inc. Earnings after interest and taxes = R200,000
Earnings per share = R2.00
Shareholders' equity = R2,000,000
Market/Book ratio = 0.20

Question

Quizplus · Accepted Answer

The market price per share is calculated by multiplying the book value per share by the market/book ratio. The book value per share is shareholders' equity divided by the number of shares, which is R2,000,000 / (R200,000 / R2.00) = R20.00. The market price per share is R20.00 * 0.20 = R4.00.

Given the Following Information, Calculate the Market Price Per Share