Question
A firm has total assets of 15 million TL. Its current assets is 5 million TL and fixed assets (machinery, real estate etc) is 10
A firm has total assets of 15 million TL. Its current assets is 5 million TL and fixed assets (machinery, real estate etc) is 10 million TL. This firms financial leverage (total liabilities/ total assets) is %60. Firm has 1 500 000 total outstanding shares with 1 000 000 shares trading at the stock market and one share sells 5 TL in the stock market. What is the firms Price/Book ratio( PD/DD)? Calculate the expected stock price and market cap if the average Price/Book ratio (PD/DD) of the comparable firms is 1,4. Would you invest in this stock?
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