You are looking at some financial ratios that a colleague calculated as part of an analysis...

Transcribed Image Text:

You are looking at some financial ratios that a colleague calculated as part of an analysis project. They indicate the company's ROE is equal to 0.22, the company's PM equals 0.08 and the TAT equals 0.75. They also mention that the book value equity for the firm equals $225 million. If you know the total debt for the firm equals $352 million and all of the other information is correct, by how many dollars in millions must the value of the firms equity be miscalculated by your colleague? Answer as a dollar value(in millions), with no cents. You are looking at some financial ratios that a colleague calculated as part of an analysis project. They indicate the company's ROE is equal to 0.22, the company's PM equals 0.08 and the TAT equals 0.75. They also mention that the book value equity for the firm equals $225 million. If you know the total debt for the firm equals $352 million and all of the other information is correct, by how many dollars in millions must the value of the firms equity be miscalculated by your colleague? Answer as a dollar value(in millions), with no cents.

Answer rating: 100% (QA)

To determine the discrepancy in the valuation of the firms equity as a result of the miscalculations ... View the full answer