The Balance Sheet of a firm has the following items of the Right Side: Short Term Debt $5,995 Long Term Debt $2,173 Accounts Payable $3,605 Total Liabilities & Owners Equity $12,515 Other firms in the same industry have an average Market Price of Equity to Book (P/B) ratio of 7.3. Assuming the firm should have a P/B ratio equal to the average, what should the Market Price of Equity of the firm be?

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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The Balance Sheet of a firm has the following items of the Right Side:
Short Term Debt
$5,995
Long Term Debt
$2,173
Accounts Payable
$3,605
Total Liabilities & Owners Equity
Other firms in the same industry have an average Market Price of Equity to Book (P/B) ratio of 7.3.
Assuming the firm should have a P/B ratio equal to the average, what should the Market Price of
Equity of the firm be?
$12,515
Transcribed Image Text:The Balance Sheet of a firm has the following items of the Right Side: Short Term Debt $5,995 Long Term Debt $2,173 Accounts Payable $3,605 Total Liabilities & Owners Equity Other firms in the same industry have an average Market Price of Equity to Book (P/B) ratio of 7.3. Assuming the firm should have a P/B ratio equal to the average, what should the Market Price of Equity of the firm be? $12,515
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