XYZ food company has a book value of $ 50 million

Finance Dec 21, 2020

XYZ food company has a book value of $ 50 million. If the average market value / book value
of companies in the food sector is 2.84, what is the corporate value of XYZ food company?

Expert Solution

Answer:

Average market value / book value = 2.84

Book value = $50000000

Market value / book value = Market capitalization / Book value

2.84 = Market capitalization / $50000000

Market capitalization = $50000000 * 2.84

= $142000000

The corporate value of XYZ food company is $142000000

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