Foundations Of Finance
Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Chapter 4, Problem 4SP

(Price/ book) Chang, Inc.’s balance sheet shows a stockholders’ equity book value (total common equity) of $750,500. The firm’s earnings per share were $3, resulting in a price/ earnings ratio of 12.25X. There are 50,000 shares of common stock outstanding. What is the price/book ratio? What does this indicate about how shareholders view Chang, Inc.?

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