Question

Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 520,000 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

Answer 1

$17.64

Step-by-step explanation:

Calculation for By how much do the firm's market and book values per share differ

Using this formula

Market and book values per share=[Price per share- (Total common equity/Shares of stock outstanding)]

Let plug in the formula

Market and book values per share=[$27.50 per share-($5,125,000 / 520,000)

Market and book values per share=($27.50 per share -$9.86)

Market and book values per share=$17.64

Therefore By how much do the firm's market and book values per share differ is $17.64