In: Finance
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 |
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