A company has current assets with a book value of $35 million, which equals their market value. Its fixed assets have a book value of $85 million but could be sold for $125 million today. The firm's total debt has a book value of $60 million, but due to interest rate changes, the market value of the debt is now $75 million. What is the ratio of the market value of equity to its book value? (Round the answer to 2 decimal places.)
A company has current assets with a book value of $35 million, which equals their market value. Its fixed assets have a book value of $85 million but could be sold for $125 million today. The firm's total debt has a book value of $60 million, but due to interest rate changes, the market value of the debt is now $75 million. What is the ratio of the market value of equity to its book value? (Round the answer to 2 decimal places.)
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 8P
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Hello tutor please help me with accounting questions
Transcribed Image Text:A company has current assets with a book value of $35 million, which equals their market value.
Its fixed assets have a book value of $85 million but could be sold for $125 million today. The
firm's total debt has a book value of $60 million, but due to interest rate changes, the market value
of the debt is now $75 million. What is the ratio of the market value of equity to its book value?
(Round the answer to 2 decimal places.)
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