Peoples Inc Has A Book Value Of Equity

Fixed assets are 18 380 and current liabilities are 1 630.

Peoples inc has a book value of equity. It is calculated by multiplying a company s share price by its number of shares outstanding whereas book value or shareholders equity is simply the difference between a company s assets and liabilities. Suppose a company has a book value of 35 million and there are 1 4 million common shares outstanding. Has an after tax operating margin of 6.

Market value of equity vs book value of equity. Estimate the value of bigname inc s brand name. Divide 35 million by 1 4 million shares for a book value per share of 25.

Price to book value p b is the ratio of the market value of a company s shares share price over its book value of equity. The firm s average interest rate on the debt on its books is 10 this is the interest expense divided by the face value of the debt which is entirely in the form of 10 year corporate bonds. It can be useful to compare the market price of shares to the book value.

The book value of equity in turn is the value of a company s assets. Billion book value of capital invested of 2 5 billion and a cost of capital of 9. Therefore the market value per share is 32 and the book value per share is 24.

The equity value of a company is not the same as its book value. The firm has a negative book value of equity and negative net income. The shares outstanding are 5 000.

And the negative equity. Since the company s market value is greater than its book value the market expects a return of 18. I buy stocks all the time most stocks i buy in fact that have positive tangible equity in excess of my purchase price that is they trade below tangible book value.