Question

Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how much do the firm's market and book values per share differ?

Answer 1

The difference is $9,450,000

Step-by-step explanation:

Market Value of Share = $27.50 x 530,000

=$14,575,000

Book Value = $5,125,000.

Difference = $14,575,000- $5,125,000.

=$9,450,000

The market value is greater than book value by $9,450,000