What Is the Book Value Per Share for a Firm

question 78

Multiple Choice

What is the book value per share for a firm with 2 million shares outstanding at a price of $50, a market-to-book ratio of .75, and a dividend payout ratio of 50%?

• A)$33.33
• B)$44.44
• C)$55.55
• D)$66.67 market-to-book ratio = stock price/book value per share
• )75 = $50/book value per share

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Definitions:

GDP Deflator

An indicator for the pricing levels of all new, domestically produced, consumable goods and services within an economy.

Population

The total number of people living in a specific area or country at a given time.

Net Domestic Product

The sum of the market value of all domestically produced goods and services in a country during a given time period, subtracting the loss in value from depreciation.

Indirect Business Taxes

Taxes levied on the production, sale, or consumption of goods and services, such as sales tax or value-added tax (VAT), indirectly paid by consumers.