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14 January, 20:27

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?

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  1. 14 January, 20:50
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    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
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