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Dear sir, please help me how to calculate market value of equity in this question: Book value of share capital (Share of $1): 450 ml.Current share price(pence):500ml. The answer: market value of equity =450×5=2250ml.I do not understand the answer.Thank you.
The nominal value of shares is $450M. Each share has a nominal value of $1. Therefore there are 450M shares.
Each share has a nominal value of $5. Therefore the total MV is 450M x 5 = $2,250MSorry, you mean that each share has maket value(not nominal value) of 5USD?But how can you calculate the value of 5USD?
Do you mean 500ml pence = 5USD?If so I understand.I have never known about this convertion so far.
I don’t know where you found this question because unless you mistyped it then it is stupid.
Firstly because you have dollars and cents (pence go with pounds, but the exam is always $’s and cents).
Secondly when it says that the share price (pence) is 500, not only should it have been cents and not pence (and therefore 500 cents is $5), but I have no idea what ‘ml’ means. (Presumably it is supposed to mean ‘million’ but the abbreviation for million is ‘m’ in the exam, and to put it after the 500 is complete nonsense).I assumed that you had mistyped, but if it is typed like that in your book then I suggest you get a different book. You should be using a Revision Kit from one of the ACCA approved publishers (BPP and Kaplan) – if you found the question typed like this in one of those books then I will be astonished 🙂
Dear sir, this question is in BPP work book , No 52, Katash company..Exactly, the wording is that “current share price (pence) is 500 , with unit of $m on the top of this column.Maybe unit $m do not apply for current share price.It should be 500 cent=5$.Anyway, it maybe a mistake in typing of this book and if so,I am clear.Thank you.
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