Superior Medical System\'s 2015 balance sheet showed total common equity of $2,0

Question

Superior Medical System's 2015 balance sheet showed total common equity of $2,050,000. The company had 100,000 shares of stock outstanding which sold at a price of $57.25 per share. By how much did the firm's market value per share and book value per share differ? A.  $36.75 B.  $38.25 C.  $39.50 D.  $40.25 E.  $51.00 Superior Medical System's 2015 balance sheet showed total common equity of $2,050,000. The company had 100,000 shares of stock outstanding which sold at a price of $57.25 per share. By how much did the firm's market value per share and book value per share differ? A.  $36.75 B.  $38.25 C.  $39.50 D.  $40.25 E.  $51.00

Explanation / Answer

Ans) A. $36.75

Explanation:

Book Value per Share = Total Common Equity on the Balance Sheet / No. of Shares Outstanding

                                   = 2,050,000 / 100,000 = $20.5

Market Value per share = $57.25

Difference Between the firm's Market Value per share and Book Value per share = 57.25 - 20.5

                                                                                                                                             = $36.75

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