Market value of the entire corporation, Financial Accounting

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Company X is presumably doing well. The corporation's balance sheet last September 31 can be summarized as follows:

Total Assets                                                                                            $6,000,000

Total Liabilities                                                                                       $2,000,000

Stockholder's equity:

Common stock:                                                                                     1,500,000 shares

of $1.00 par value shares issued

andoutstanding                                                              $1,500,000

Retained Earnings                                                             $3,000,000

Total Stockholders' equity                                                  $4,500,000

Total Liabilities & Stockholders'

Equity                                                                              $6,500,000

Net Income last year was $.5 million. The common stock is currently selling for $11.00 per share.

Compute the following and show the formula:

Book value of the corporation

Book value per share

Value of the corporation if earnings are capitalized at 200

Capitalized value per share

Market value of the entire corporation.


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