Question

Bauer Software's current balance sheet shows total common equity of $4,653,400. 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

Answer 1

Difference between market value and book value = $18.72 (Approx)

Step-by-step explanation:

Given:

Common equity = $4,653,400

Number of shares = 530,000

Selling price = $27.50 per share

Find:

Difference between market value and book value

Computation:

Difference between market value and book value = $27.50 per share - [$4,653,400 / 530,000]

Difference between market value and book value = $27.50 per share - 8.78 per share

Difference between market value and book value = $18.72 (Approx)