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20 May, 09:31

Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how much do the firm's market and book values per share differ?

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  1. 20 May, 09:33
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    The difference is $9,450,000

    Explanation:

    Market Value of Share = $27.50 x 530,000

    =$14,575,000

    Book Value = $5,125,000.

    Difference = $14,575,000 - $5,125,000.

    =$9,450,000

    The market value is greater than book value by $9,450,000
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