n NISM Certifications
XV NISM Series XV
Medium

A company has a Price-to-Book (P/B) ratio of 12 and a Book Value per share of Rs. 7. The company’s market capitalization is Rs. 2,100,000. How many shares are outstanding?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    12,500

  2. 25,000

    Correct answer

  3. C

    32,600

  4. D

    39,500

Why this is the answer

Market Price per Share = P/B × Book Value = 12 × 7 = Rs. 84. Number of Shares Outstanding = Market Capitalization ÷ Market Price = 2,100,000 ÷ 84 = 25,000 shares. Other options are incorrect because they do not align with this fundamental calculation.

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