Question

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 $27.50 per share. By how much do the firm's market and book values per share differ?

Answer 1

$17.04

Step-by-step explanation:

Book value per share of equity = $5,125,000 / 490,000 = $10.46

Market price per share = $27.50

$27.50 - $10.46 = $17.04