On August 1, 2007, Dell Computer Corporations stock closed trading at $27.76 per share, whereas Apple Corporations

On August 1, 2007, Dell Computer Corporation’s stock closed trading at $27.76 per share, whereas Apple Corporation’s shares closed at $133.64. Does this mean that because Apple’s stock price is roughly four times that of Dell’s, Apple is the more valuable company? Interpret the prices for these two firms using the followinginformation:

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(Most recent 12 months) Dell 2007 Apple 2007 Net income ( millions) Shares outstanding (millions) Earnings per share () Price per share (8/1/07) Price-to-earnings ratio (PE ratio) Book value of common equity ( millions) Book value per share (S) Market-to-book ratio $3,572 3,130 869.16 $ 1.55 3.60 $27.76 $133.64 37.11 $4,129 S 9,984 $1.80 11.49 2,300 17.91 15.42 11.63