In early 2018, Adidas (ADS) had a book equity of ($1,397) million, a price per share of

Question:

In early 2018, Adidas (ADS) had a book equity of $$1,397$ million, a price per share of $$24.68,$ and 69.52 million shares outstanding. At the same time, Nike (NKE) had a book equity of $$3,000$ million, a share price of $$41.86,$ and 422.62 million shares outstanding.

a. What is the market-to-book ratio of each of these clothing retailers?

b. What conclusions can you draw by comparing the two ratios?

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