McHardie & Company has Total Equity of $129,600. There are 30,000 shares of common stock outstanding at a market price of $31.40 a share. What is the Market-to-Book ratio?

The Market-to-Book ratio is 7.27

Explanation:

Market to book value is the ratio of current market value of company's equity to book value of company's equity. it shows how market value the each $1 book value of share.

Total Equity at book value = $129,600

Outstanding shares = 30,000 shares

Market price = $31.40

Market value of outstanding shares = 30,000 x 31.40 = $942,000

Market to book ratio = Market capitalization / Total book value

Market to book ratio = $942,000 / 129,600

Market to book ratio = 7.27 times