A firm has current assets with a book value and market value of $30 million. The book value of its fixed assets is $70 million, but their market value is $100 million. The firm also has total debt with a book value of $50 million, but due to rising interest rates, the market value of the debt has decreased to $45 million. What is the ratio of market value of equity to book value of equity? (Round your answer to 2 decimal places)
A firm has current assets with a book value and market value of $30 million. The book value of its fixed assets is $70 million, but their market value is $100 million. The firm also has total debt with a book value of $50 million, but due to rising interest rates, the market value of the debt has decreased to $45 million. What is the ratio of market value of equity to book value of equity? (Round your answer to 2 decimal places)
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 8P
Related questions
Question
Please explain the solution to this general accounting problem with accurate principles.
Transcribed Image Text:A firm has current assets with a book value and market value
of $30 million. The book value of its fixed assets is $70 million,
but their market value is $100 million. The firm also has total
debt with a book value of $50 million, but due to rising interest
rates, the market value of the debt has decreased to $45
million.
What is the ratio of market value of equity to book value of
equity? (Round your answer to 2 decimal places)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT