Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Using the Financial Statements document you can see that the total book value of Chipotle Mexican Grill stockholders equity was $1,683,026,000 or $60.67 per share

Using the Financial Statements document you can see that the total book value of Chipotle Mexican Grill stockholders equity was $1,683,026,000 or $60.67 per share as of December 31, 2019. On this same date the stock market valued the equity of the company at $23,225,037,600 (calculated as the 12/31/2019 stock price of $837.24 per share multiplied by the weighted average number of basic shares outstanding for 2019 of 27,740,000 shares). This is a difference of approximately $21.5 billion or $776.57 per share ($837.24 market price minus the $60.67 book value per share). How could there be such a big difference between what the accountants say is the stockholder book value and what the market Chipotles stock is worth. Please discuss why this could be justified and listing specific reasons or why you believe this may be unjustified also listing specific reasons.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Options Futures And Other Derivatives

Authors: John C. Hull

9th Edition

0133456315, 9780133456318

Students also viewed these Finance questions

Question

Prove that 10n^4 + 5n is not O(n^2).

Answered: 1 week ago

Question

U11 Informing Industry: Publicizing Contract Actions 317

Answered: 1 week ago