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Bauer current balance sheet shows total common equity of $5,125,000. The company has 490,000 shares of stock outstanding...

Bauer 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 $27.50 per share. By how much do the firm
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Answer #1
Book Value = Total Stockholders equity/No of shares issued
ie BV = $5,125,000/490,000 = $10.46

Mkt Value per share = $27.50

So Firm’s market and book values per share differ by 27.50 - 10.46 = $17.04

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