Case Analysis Of Winston Washer's Market-To Book Ratio

644 Words 3 Pages
Register to read the introduction… Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winston’s market/book ratio?
Market value per share = $75 common equity = 6,000,000 number of shares outstanding = 800 millions shares
Market-to-book ratio = market value per share/(common equity/number of shares outstanding)

Market-to-book ratio = $75/(6,000,000/800,000,000)
Market-to-book ratio = $75/(6,000,000/800,000,000) market-to-book ratio = $75/7.5 market-to-book ratio = 10
Winston Washer’s market-to-book ratio is 10.
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