Conglomicorp Inc.has 10.5 million shares of stock outstanding with a book value of $25 per share and a market value of $93 per share.The firm also has $40 million in retained earnings and a required rate of return of 8%.What is the current market capitalization for the firm?

Question

Quizplus · Accepted Answer

Market capitalization is calculated as follows:

Market capitalization = Number of shares outstanding * Market price per share

Number of shares outstanding = 10.5 million

Market price per share = $93

Market capitalization = 10.5 million * $93 = $976,500,000

Therefore, the current market capitalization for the firm is $976,500,000. Option B is the correct answer.