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Calculate the market to book ratio of a firm with a current share price of $31.47,...

Calculate the market to book ratio of a firm with a current share price of $31.47, a book value of equity of $2,000,000,000, and 100,000,000 shares outstanding. Watch your units (billion, millions). Round your answer to four decimal places; example 1.1234.

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Answer #1

The market to book ratio is computed as shown below:

= (Current share price x Number of shares outstanding) / Book value of equity

= ($ 31.47 x 100,000,000) / $ 2,000,000,000

= 1.5735

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