Edelman Engines has $13 billion in total assets. Its balance sheet shows $2.6 billion in current...

Edelman Engines has $13 billion in total assets. Its balance sheet shows $2.6 billion in current liabilities, $9.1 billion in long-term debt, and $1.3 billion in common equity. It has 400 million shares of common stock outstanding, and its stock price is $34 per share. What is Edelman's market/book ratio? Round your answer to two decimal places.

Expert Solution

Information provided:

Total assets= $13 billion

Current assets= $2.6 billion

Long term debt= $9.1 billion

Common equity= $1.3 billion

Shares outstanding= 400 million shares

Stock price= $34 per share

Book value per share = Book value of equity/ Shares outstanding

= $1,300,000,000/ 400,000,000

= $3.25

Market to book ratio= Market value per share/ Book value per share

= $34/ $3.25

= 10.46.

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jeff jeffy answered 1 year ago

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