Chisel Corporation has 2.833 million shares outstanding at a price per share of $3.92. If the...
Chisel Corporation has 2.833 million shares outstanding at a price per share of $3.92. If the debt-to-equity ratio is 1.41 and total book value of debt equals $12,500,000, what is the market-to-book ratio for Chisel Corporation?
Homework Answers
Market value of equity = 2,833,000 × $3.92 = $11,105,360
Book value of equity = $12,500,000 / 1.41 = $8,865,248.23
Market-to-book ratio = $11,105,360 / $8,865,248.23 = 1.25
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