(Analyzing market values using financial ratios) On August 1, 2007 the Dell Computer Corporation's stock closed trading at $27.76 per share while 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 information found here: EEB It appears that Apple enjoys aprice per share when compared to its 2007 earnings but aprice when compared to the book value of the firm's equity. The | | market-to-book ratio for Apple reflects that fact that Apple has used a great deal | equity (and | | debt) to finance its operations (Select from the drop-down menus.) Data Table Dell 2007Apple 2007E (Most recent 12 months) Net Income ( millions) Shares outstanding (millions) Earnings per share (S) 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 2,300 $1.55 $27.76 17.91 $4,129 $1.80 15.42 $3,130 869.16 $3.60 $133.64 37.11 $9,984 $11.49 11.63