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Hello, in part A, can you please tell me how the value for market value of equity was arrived at (for e.g. in 20×8 it was 47.5)
market value of equity is calculated by multiplying the number of shares with the maket price per share.
as the par value of shares is $1 so number of shares equal to = $5.5/$1=5.5 million shares
and share price in 20×8 is $8.64 per share so multiplying $8.64 with 5.5 million share
we get $47.5
similarly for year 20×7 : $5.74* 5.5 million shares = $31.57 million
please note that no of shares have been same i .e 5.5 in all four years but share price has changed from year to year and it is given in last row of the financial information
hope that helps
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