Question

Edelman Engines has $18 billion in total assets. Its balance sheet shows $2.7 billion in current liabilities, $8.1 billion in long-term debt, and $7.2 billion in common equity. It has 700 million shares of common stock outstanding, and its stock price is $29 per share. What is Edelmans market/book ratio? Round your answer to two decimal places.

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Answer #1

Book value per share=$7.2 billion/700 million shares

=$10.28571429(Approx)

Market/book ratio=Market value per share/Book value per share

=$29/$10.28571429

which is equal to

=2.82(Approx).

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