BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

BUSINESS MATHEMATICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The market price of a share of stock one year ago was P50. Since then, the market price has increased by 8%. Find the increase in the market place.
A
P4.00
B
P50.00
C
P8.00
D
P12.00
Explanation: 

Detailed explanation-1: -Market Price per Share = Current market price of the share. Book Value per Share = (Total assets-intangible assets-total liabilities) ÷ number of outstanding shares1.

Detailed explanation-2: -To estimate the market price for the date, look in the company’s annual report for the accounting period for the P/E ratio and earnings per share. Multiply the two figures. For instance, if the P/E ratio is 20 and the company reported EPS of $7.50, the estimated market price works out to $150 per share.

Detailed explanation-3: -Book Value per Share: It is calculated by dividing the company’s equity by the total number of outstanding shares. Market Value per Share: It is calculated by considering the market value of a company divided by the total number of outstanding shares.

Detailed explanation-4: -Once a company goes public and its shares start trading on a stock exchange, its share price is determined by supply and demand in the market. If there is a high demand for its shares, the price will increase. If the company’s future growth potential looks dubious, sellers of the stock can drive down its price.

There is 1 question to complete.