A firm has current assets that could be sold for their book value of $34 million. The book value of its fixed assets is $72 million, but they could be sold for $102 million today. The firm has total debt with a book value of $52 million, but interest rate declines have caused the market value of the debt to increase to $62 million. What is this firm's market-to-book ratio?

Respuesta :

Answer:

2.51

Explanation:

MV- Market Value

BV- Book Value

MV = 34+ 102=$ 136 million

BV = 34 + 72 –52= $54 million

MV / BV = 136 / 54 = 2.51

The firm's market-to-book ratio is 2.51

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