Bauer software's current balance sheet shows total common equity of $5,125,000. the company has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. by how much does the firm's market and book values per share differ?

Market value of common equity = 530,000 x $27.50 = $14,575,000

Book value of common equity = $5,125,000

Difference = $14,575,000 - $5,125,000 = $9,450,000

Explanation:

In this case, there is need to determine the market value of common equity by multiplying the number of common equity by the current market price.

Then, we will deduct the book value of common equity from the market value of common equity.

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