Chapter 2, Problem 24P

a.

Summary Introduction

To calculate: The book value per share for The Holtzman Corporation.

Introduction:

Book value per share:

It is a metric used by investors to know whether the price of the share is undervalued or overvalued by comparing it to the market value per share. If a company’s book value per share is lower than the market value per share, then the stock is overvalued and if the book value per share is higher than the market value per share then the stock is undervalued.

b.

Summary Introduction

To calculate: The current price of the stock for The Holtzman Corporation.

Introduction:

Current price of stock:

The most recent price of a company’s stock prevailing in the stock indices is termed as its current price. It is the price at which the buyer would be willing to buy the security.

c.

Summary Introduction

To calculate: The ratio of the market value per share to the book value per share.

Introduction:

Book value per share:

It is a metric used by investors to know whether the price of the share is undervalued or overvalued by comparing it to the market value per share. If a company’s book value per share is lower than the market value per share, then the stock is overvalued and if the book value per share is higher than the market value per share then the stock is undervalued.

Market value per share:

Market value per share is the real value of each share assigned by the market. It can be calculated by dividing the market value of the business by the number of outstanding shares.