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trasher [3.6K]
3 years ago
15

Jericho Motors has $4 billion in total assets. The other side of its balance sheet consists of $0.4 billion in current liabiliti

es, $1.2 billion in long-term debt, and $2.4 billion in common equity. The company has 500 million shares of common stock outstanding, and its stock price is $25 per share. What is Jericho’s market-to-book ratio?
Business
1 answer:
Alexxandr [17]3 years ago
7 0

Answer:

market to book ratio 5.208

Explanation:

4 billion assets

0.4 current liabilities

1.2 long term debt

<em>2.4 common equity</em>

500 millions shares x $25 each = 12,500 million = 12.5 billion market capitalization

market to book ratio:

\frac{market  \: capitalization}{book \: value}

12.5 / 2.4 = 5.208 times

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