Is book value the excellent proxy to the value of shares
Is book value the excellent proxy to the value of the shares?
Expert
No. This would be a miracle when the number which appears in the Shareholders’ Equity had anything to do along with the value of the shares. While we have a look at the relation among the market value and the book value of all the Spanish companies into the continuous market, we enter at several conclusions:
a) In February 2005 and December 2006 where there was no company that market value equalled its book value;
b) The average in February 2005 was 4.1 and in December 2006 it was 4.6 and
c) There was just one company in December 2006 which market value was lower than its book value. If we repeat similar exercise for the companies involved in the S and P 500, we can see that, in February 2005 and in December 2006, there was no company whose market value equaled its book value; the average was 3.8 in 2005 as well as 4.5 in 2006.
Which capital structure must we consider when estimating the WACC for a subsidiary valuation: the one which is reasonable according to the risk of the subsidiary’s business that the average of the company or the one the subsidiary as “tolerates/per
Assume that you have $50,000 which you want to invest in two companies, XYZ Books and ABC Audio. XYZ has a return of 10% and standard deviation 15%, while ABC has return of 15% with a standard deviation of 20%. The correlation coefficient between them is .5. Your port
Initial public offering: An initial public offering (IPO) otherwise called as stock market launch, is the first time company selling stock to public. Usually raised for capital expansion and to become publicly traded company. Investment banking firms
Who described option pricing with deterministic volatility?
What is Bond Price Information: Answer: Corporate bond market is not considered to be much transparent as it trades predominantly over the counter and investors do n
My Company paid an extremely higher price for the acquisition of other company; the price was recommended through the valuation of an investment bank. Now we have financial problems. So is there any way to make this bank legally responsible for such situation?
What is the market risk premium within Spain at the present time – the number that I have to use in the valuations?
How could we project exchange rates within order to be capable to forecast exchange differences?
What is the Capital Cash Flow?
If the model could not even find bond prices right, how could this hope to accurately value bond options?
18,76,764
1927979 Asked
3,689
Active Tutors
1430209
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!