Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 2, Problem 23P
Summary Introduction
To calculate:The book value per share of Landers Nursery and Garden Stores.
Introduction:
Book value per share:
It is a metric used by investors to know whether the price of a share is undervalued or overvalued by comparing it to the market value per share. If a company’s book value per share is lower than the market value per share, its stock is overvalued and, if the book value per share is higher than the market value per share, the stock is undervalued.
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Landers Nursery and Garden Stores has current assets of $220,000 and fixed assets of $170,000. Current liabilities are $80,000 and long-term liabilities are $140,000. There is $40,000 in preferred stock outstanding and the firm has issued 25,000 shares of common stock. Compute book value (net worth) per share.
Landers Nursery and Garden Stores has current assets of $319,000 and fixed assets of $225,000. Current liabilities are $112,000 and long-term liabilities are $179,000. There is $40,000 in preferred stock outstanding and the firm has issued 25,000 shares of common stock.
The Holtzman Corporation has assets of $441,000, current liabilities of $105,000, and long-term liabilities of $147,000. There is $31,500 in preferred stock outstanding; 24,000 shares of common stock have been issued.
a. Compute book value (net worth) per share. (Round your answer to 2 decimal places.)
Chapter 2 Solutions
Foundations of Financial Management
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