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Price ?$45
|
Price |
?$45.70 |
|
Debt |
?$31,450,000 |
|
Equity |
?$49,360,000 |
|
Total Assets |
?$120,223,000 |
|
EBITDA |
?$17,292,000 |
|
Shares Outstanding |
?4,230,000 |
Play Now Inc. manufactures and distributes? children's playground equipment. Select financial information on the company is provided in the? table, above. Shares of Play Now are currently trading for? $45.70. What is the
market−to−book
ratio for Play Now? Inc.?
A.
3.91
B.
1.60
C.
6.95
D.
2.43
Expert Solution
Market to book ratio is calculated by = Market Price of share / Book Value per share
Market price = $ 45.70
Book Value of share is not provided. We need to calculate that.
Given that:
Debt = $ 31,450,000
Equity = $ 49,360,000
Shares outstanding = 4,230,000
Book Value of share is calculated by = Amount available for equity shareholders / Shares outstanding
= 49,360,000 / 4,230,000
= $ 11.67
Hence, Market to book ratio = 45.7 / 11.67
= 3.91
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