A fiRm Has a Total Book Value of Equity of $2

question 7

Multiple Choice

A firm has a total book value of equity of $2 million, a market to book ratio of 2, and a book value per share of $5.00. What is the total market value of the firm's equity?

• A) $10
• B) $500,000
• C) $2 million
• D) $4 million
• E) $20 million

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Definitions:

Coefficient Of Variation

The coefficient of variation is a standardized measure of dispersion of a probability distribution or frequency distribution, expressed as a percentage of the mean.

Empirical Rule

A statistical principle that indicates almost all values in a normal distribution lie within three standard deviations from the average.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Interquartile Range

The difference between the third quartile (75th percentile) and the first quartile (25th percentile), a measure of variability that indicates the spread of the middle 50% of a dataset.