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

 

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(Most recent 12 months) Dell 2007 Apple 2007 $ 3,130 Net income ($ millions) Shares outstanding (millions) Earnings per share ($) Price per share (8/107) Price-to-earnings ratio (PE ratio) Book value of common equity ($ millions) Book value per share ($) $3,572 2.300 869.16 $ 1.55 $27.76 $ 3.60 $133.64 17.91 37.11 S 9,984 S 11.49 $4,129 $ 1.80 15.42 Market-to-boolk ratio 11.63 (Most recent 12 months) Dell 2007 Apple 2007 $ 3,130 Net income ($ millions) Shares outstanding (millions) Earnings per share ($) Price per share (8/107) Price-to-earnings ratio (PE ratio) Book value of common equity ($ millions) Book value per share ($) $3,572 2.300 869.16 $ 1.55 $27.76 $ 3.60 $133.64 17.91 37.11 S 9,984 S 11.49 $4,129 $ 1.80 15.42 Market-to-boolk ratio 11.63