An analyst gathers the following information for a firm:
Liabilities $12 M
Retained Earnings $25 M
Additional Paid In Capital $25 M
Common Stock $2 par value - Authorized 12 M - Issued 8 M
Treasury Stock (400,000 shares) $5 M
Market price per share $16

What is the Price to Book ratio for the firm?

Explanation: First estimate the book value of equity = # of issued common stock * par value + additional paid in capital + retained earnings - treasury stock. Next find book value per share by dividing (# of issued shares - treasury stock). Finally divide market price by book value per share.