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M/B AND SHARE PRICE You are given the following information: Stockholders' equity as reported on the...

M/B AND SHARE PRICE

You are given the following information: Stockholders' equity as reported on the firm’s balance sheet = $6.75 billion, price/earnings ratio = 16.5, common shares outstanding = 74 million, and market/book ratio = 1.8. Calculate the price of a share of the company's common stock. Round your answer to the nearest cent.

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Answer #1
Book value of Shareholders equity = 6750000000
Market to book ratio = 1.8
So, Market value = 6750000000 * 1.8 = 12150000000
Common shares outstanding = 74000000
Price per share = Market value / common shares outstanding
12150000000/74000000
$164.19
So, price of a share of company's common stock is $164.19
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