The shareholders of ABC Corporation would like to know the valuation of their ownership in the entity. Relative valuation based on its two closest competitors will be made. The price-book value ratio will be used. X Inc. Y Co. Market value of ordinary shares 5,980,000 7,020,000 Book Value of ordinary shares 5,200,000 6,000,000 ABC has a book value of ordinary shares at P5,800,000. This includes an investment property that provides additional income. It has a book value of P420,000 but a market value of P650,000. Also, a material error in the accounts payable was identified and it resulted to a P300,000 understatement. After considering these, the remaining and corrected book value can be valued using relative valuation. What is the total relative value of ABC ordinary shares?
The shareholders of ABC Corporation would like to know the valuation of their ownership in the entity. Relative valuation based on its two closest competitors will be made. The price-book value ratio will be used. X Inc. Y Co. Market value of ordinary shares 5,980,000 7,020,000 Book Value of ordinary shares 5,200,000 6,000,000 ABC has a book value of ordinary shares at P5,800,000. This includes an investment property that provides additional income. It has a book value of P420,000 but a market value of P650,000. Also, a material error in the accounts payable was identified and it resulted to a P300,000 understatement. After considering these, the remaining and corrected book value can be valued using relative valuation. What is the total relative value of ABC ordinary shares?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The shareholders of ABC Corporation would like to know the valuation of their ownership in the entity. Relative valuation based on its two closest competitors will be made. The price-book value ratio will be used.
| X Inc. | Y Co. | |
| Market value of ordinary shares | 5,980,000 | 7,020,000 |
| Book Value of ordinary shares | 5,200,000 | 6,000,000 |
ABC has a book value of ordinary shares at P5,800,000. This includes an
investment property that provides additional income. It has a book value of
P420,000 but a market value of P650,000. Also, a material error in the
accounts payable was identified and it resulted to a P300,000
understatement. After considering these, the remaining and corrected book
value can be valued using relative valuation. What is the total relative value
of ABC ordinary shares?
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