contestada

Dandelion Fields has a Tobin's Q of .96. The replacement cost of the firm's assets is $225,000 and the market value of the firm's debt is $101,000. The firm has 20,000 shares of stock outstanding and a book value per share of $2.09. What is the market-to-book ratio?

Respuesta :

beritop1089

Answer:

2.75 times

Explanation:

First, Tobin's Q = Market value of asset / replacement cost of firm's assets.

Use the above equation to find the market value of Asset.

Market value of Asset = Tobin's Q * replacement cost of firm's assets;

Market value of Asset = 0.96 * 225,000 = 216,000

Next, find Market value of equity;

Market value of equity = Market value of asset - market value of debt

Market value of equity = 216,000 - 101,000 = 115,000

Market value per share is therefore, 115,000/20,000 = $5.75  per share

Market-to-book value ratio = market value per share / book value per share;

Market-to-book value ratio = 5.75/2.09 = 2.75 times

Otras preguntas