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Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has...

Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 490,000 shares of stock outstanding, and they sell at a price of $27.50per share. By how much do the firm's market and book values per share differ?
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Answer #1

Book value per share is

$5,125,000 / 530,000 shares = $9.67 per share.

So $27.50 per share - $9.67 per share = $17.83 per share difference.

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Answer #2

Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how much do the firm's market and book values per share differ?

Shares outstanding                                   530,000

Price per share                                            $27.50

Total book common equity                                  $5,125,000

Book value per share = Total book equity/Number of shares                   $9.67

Difference between book and market values                $17.83 ANSWER

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Answer #3

Shares outstanding                                                                                                       530,000

Price of individual share                                                                                               $27.50

The Total book common equity                                                                                     $5,125,000

Book value individual share = Total book equity/total number of shares                           $9.67

Difference between book and market values                                                                   $17.83

answer: $17.83

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