A firm has current assets that could be sold for their book value of $24 million. The book value of its fixed assets is $62 million, but they could be sold for $92 million today. The firm has total debt with a book value of $42 million, but interest rate declines have caused the market value of the debt to increase to $52 million. What is the ratio of the market value of equity to its book value? (Round the answer to 2 decimal places.)
A firm has current assets that could be sold for their book value of $24 million. The book value of its fixed assets is $62 million, but they could be sold for $92 million today. The firm has total debt with a book value of $42 million, but interest rate declines have caused the market value of the debt to increase to $52 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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Transcribed Image Text:A firm has current assets that could be sold for their book value of
$24 million. The book value of its fixed assets is $62 million, but they
could be sold for $92 million today. The firm has total debt with a
book value of $42 million, but interest rate declines have caused the
market value of the debt to increase to $52 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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