Greene, Inc.'s balance sheet indicates that the book value of​ stockholders' equity​ (book value per share×total shares​ outstanding) is $750,800. The​ firm's earnings per share are $3.24​, which produces a​ price-earnings ratio of 12.32. If there are 49,000 shares of common stock​ outstanding, what is the​ firm's market-to-book ratio​ (i.e., the ratio of price per share to book value per​ share)? What does the​ market-to-book ratio tell​ us?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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 ​Greene, Inc.'s balance sheet indicates that the book value of​ stockholders' equity​ (book value per
share×total
shares​ outstanding) is
$750,800.
The​ firm's earnings per share are
$3.24​,
which produces a​ price-earnings ratio of
12.32.
If there are
49,000
shares of common stock​ outstanding, what is the​ firm's market-to-book ratio​ (i.e., the ratio of price per share to book value per​ share)? What does the​ market-to-book ratio tell​ us?
 
 
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