Answer:
Market-to-book ratio=3.44591 times
Explanation:
Give data:
Total assets=$1.37 billion
Current liabilities=$186 m
Long term debt=$414 m
Common Equity=$770 m
Number of share of common stock= 57 m
Current stock price=$46.55
Required:
the firm's market-to-book ratio=?
Solution:
We will calculate the book value of each share:
Book value per share=[tex]\frac{common\ equity}{Number\ of\ common\ shares}[/tex]
Book value per share=[tex]\frac{\$770 m}{57 m}[/tex]
Book value per share=$13.50877
Market-to-book ratio=[tex]\frac{Market\ value}{Book\ value}[/tex]
Market-to-book ratio=[tex]\frac{\$46.55}{\$13.50877}[/tex]
Market-to-book ratio=3.44591 times
