Chisel Corporation has 2.000 million shares outstanding at aprice per share of $2.00. If the...

Chisel Corporation has 2.000 million shares outstanding at a price per share of $2.00. If the debt-to-equity ratio is 1.00 and total book value of debt equals $12,250,000, what is the market-to-book ratio for Chisel Corporation? (Round answer to 2 decimal places, e.g.12.25.)

Market-to-book ratio

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Expert Solution

Debt/Equity = 1

=> Debt = Equity

Debt = $12,250,000

Equity = $12,250,000 ---> Book value of Equity

Market value of equity 2,000,000 * $2 = $4,000,000

Market to book ratio = $4,000,000/$12,250,000 = 0.3265

Market to book ratio = 0.33

jeff jeffy answered 2 years ago

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