Determine by how much MIKE share/ or the MIKE firm is over/ (undervalued)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Direct Comparison Using Book Values
You would like to make a direct comparison between MARK Inc. and MIKE Inc. stocks. MARK and MIKE shares are valued at 50 and 60 respectively. MARK has a total book value of 54,000,000 for its 1,200,000 outstanding ordinary shares.
On the other hand, MIKE has a total book value of 208,000,000 for its 4,000,000 outstanding ordinary shares.
Determine by how much MIKE share/ or the MIKE firm is over/ (undervalued)
Note: undervaluation positive and overvaluation negative
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