Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 18

Tinsley Inc. is an industry-leading cardboard manufacturer. You have been asked to determine a market value for the firm’s equity. The firm has 100,000 shares outstanding, earnings per share of $2.50 last year, and a stock price of $25. What is the market value?

Step 1 of 4

Firm’s market value is determined by multiplying current share price into the number of share outstanding. This market value provide clear picture of equity at the market and which indicates the current value of the company. It is known as firm’s market capitalization.