Use the following information for ECE incorporated:
Assets $200 million
Shareholders' Equity $100 million
Sales $300 million
Net Income $15 million
Interest Expense $2 million
-If ECE's shares are currently trading at $24.00 and ECE has 25 million shares outstanding, then ECE's market-to-book ratio is closest to:
A)0.24
B)4
C)6
D)30

Question

Quizplus · Accepted Answer

The market-to-book ratio is calculated as the market value per share divided by the book value per share. The market value per share is $24.00. The book value per share is the shareholders' equity divided by the number of shares outstanding, which is $100 million / 25 million shares = $4.00. Therefore, the market-to-book ratio is $24.00 / $4.00 = 6.

Use the Following Information for ECE Incorporated