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Jim and Mary's Inc stock: What is book value, over or under

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Jim and Mary's Inc. stock currently sells for $75 per share. The firm has total assets of $1,000,000 and total liabilities, including preferred stock, of $350,000. If the firm has 10,000 shares of common stock outstanding.

a) What is the book value of each share of common stock?
b) Is the stock overvalued or undervalued?
c) What might be the reason for your answer in (b).

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Solution Summary

The expert determines the book value for stocks.

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a. equity = 1000,000-350,000= 650,000
book value per share = (equity- ...

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