Question

Shares of Notung Cutlery Corp. closed 2010 at $75 per share. Notunghad 14.5 million shares outstanding. The assets are valued at $1.0 billion. The firm has $390 million in liabilities. Compute Notung’s market capitalization, market value added, and market-to-book ratio.

Answer 1

Answer:

If you considered that outstanding shares are equal that total shares, then: market capitalization is $1.085 billions; market value added is $477.5 millions and the market-ti-book ratio is 1.78.

Explanation:

To get these numbers we calculate as follow: market capitalization = number of shares multiply by the price per share (75$ x 14.5 million); marked value added = market capitalization - (total assets - liabilities) [1.085 Bn - (1 Bn - 390 m)] ; and market-to-book ratio = market capitalization / book value (1.085bn/610m)