A company has current assets with a book value of $50 million, which could be sold for $52 million. The company's fixed assets have a book value of $120 million, but they could be sold for $150 million today. The company has total debt with a book value of $80 million, but due to declining interest rates, the market value of the debt has increased to $90 million. What is the ratio of the market value of equity to its book value? (Round to 2 decimal places)
A company has current assets with a book value of $50 million, which could be sold for $52 million. The company's fixed assets have a book value of $120 million, but they could be sold for $150 million today. The company has total debt with a book value of $80 million, but due to declining interest rates, the market value of the debt has increased to $90 million. What is the ratio of the market value of equity to its book value? (Round to 2 decimal places)
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 8P
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Transcribed Image Text:A company has current assets with a book value of $50
million, which could be sold for $52 million. The
company's fixed assets have a book value of $120 million,
but they could be sold for $150 million today. The
company has total debt with a book value of $80 million,
but due to declining interest rates, the market value of the
debt has increased to $90 million. What is the ratio of the
market value of equity to its book value? (Round to 2
decimal places)
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