On August1, 2007 the Dell ComputerCorporation's stock closed trading at $27.76 per share while AppleCorporation's shares closed at $133.64. Does this mean that becauseApple's stock price is roughly four times that ofDell's, Apple is the more valuablecompany? Interpret the prices for these two firms using the information found below and fill in the BLANKS below to questions as well.

(Most recent 12 months) Dell 2007 Apple 2007

Net Income ($ millions) $3,572 $3,130

Shares outstanding (millions) 2300 869.16

Earnings per share ($) $1.55 $3.60

Price per share (8/1/07) $27.76 $133.64

Price-to-earnings ratio (PE ratio) 17.91 37.11

Book value of common equity ($ millions) $4,129 $9,984

Book value per share ($) $1.80 $11.49

Market-to-book ratio 15.42 11.63

It appears that Apple enjoys a BLANK price per share when compared to its 2007 earnings but a BLANK price when compared to the book value of thefirm's equity.

The BLANK market-to-book ratio for Apple reflects that fact that Apple has used a great deal BLANK equity(and BLANK debt) to finance its operations.