Question

Tucker Electronic System's current balance sheet shows total common equity of $3,125,000. The company has 125,000 shares of stock outstanding, and they sell at a price of $52.50 per share. By how much do the firm's market and book values per share differ?

Answer 1

Answer:

The answer is $27.50

Explanation:

Total Common Equity(stock) as per book is $3,125,000

Total outstanding shares of equity(stock) is 125,000

Therefore, Tucker Electronic System's book values per share is:

$3,125,000/125,000

$25.

And the market value per share is $52.50

Therefore, the difference between the market value per share and book values per share is:

$52.50 - $25

=$27.50