What is the market price of a share of stock for a firm with 100,000 shares outstanding, a book value of equity of $3,000,000, and a market/book ratio of 3.5?
A)$8.57
B)$30.00
C)$85.70
D)$105.00

Question

Quizplus · Accepted Answer

The market price of a share is calculated by multiplying the book value per share by the market/book ratio. The book value per share is $3,000,000 / 100,000 = $30.00. Therefore, the market price per share is $30.00 * 3.5 = $105.00.

What Is the Market Price of a Share of Stock