n NISM Certifications
XV NISM Series XV
Medium

Calculate the Book Value Per Share for a business with net worth Rs. 500,000, P/E ratio 8, EPS Rs. 4, and market cap Rs. 1,000,000.

Practice question from NISM XV Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 7

  2. B

    Rs. 3

  3. Rs. 16

    Correct answer

  4. D

    Rs. 25.50

Why this is the answer

Market Price = P/E × EPS = 8 × 4 = Rs. 32. Shares Outstanding = Market Cap ÷ Price = 1,000,000 ÷ 32 = 31,250. Book Value per Share = Net Worth ÷ Shares = 500,000 ÷ 31,250 = Rs. 16.

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