The market value equity of 1.5 billion.

It's the market's value of the owner's equity

There's two notions, there's your book value of equity, and that's the value of the equity that comes out of your balance sheet.

You have 189,000 as the value of this equity.

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

Because the book value of its equity is 5 million.

So the shareholders' equity, or you could almost say the book value of the equity of the company, is 5 million. 5 million equity.

And the denominator here is the equity, the book value of our equity, so that's 5 million.

This is the market's guess of the value of this company's equity.

So the asset value is all in equity.

Then the number that pops out on the equity side, that is a book value of your equity.

In our case, the book value of the equity was 5 million.

We're willing to say that the market value of your equity is 210,000.

I think that's what I wanted a write here, market value of equity.

And book equity per share, or the book value per share of 6.00.

So that's why the book value of the equity is now 2 billion.

By applying the same price to earnings, we're saying that the market value of this equity is 210,000, while the market value of this equity is what was it? 189,000.

And then, that gets you to the market value the equity.

Notice, the book value of my equity, well it might have changed a little bit.

And now the book value of our equity is now going to be 2 billion.

So he owns it outright so all of the 100,000 of asset value is actually his equity.

They just look purely at the equity value or the market capitalization.

Essentially when the market price of my asset dropped, all of that value came out of my equity.

In the last several videos we talked about the difference between the book value and the market value of a company's equity.

And this is the market value of the equity, what the market thinks the equity's worth.

Equity is what's left over. So let's say this is all book value.

So, remember, assets are equal to liabilites plus shareholder's equity, so if all of a sudden the market value of the equity, the market capitalization, for Ben's shoe company is 215,000... (That is the equity part right over here)

Or 0.8 billion of equity.

So I start off with 300 equity 300 gold pieces of equity.

CDOs that they have on their balance sheets is the larger than their equity value.

And 3.00 per share times half a billion shares, that's a 1.5 billion dollar market value of its equity.

So equity.

Equity tranche.

That's equity.

And so if you just subtract the 23 from the 26 billion, you get a book value of its equity.

So the question is what makes up the gap here? when we think about the market value of the equity.

And just to think about it, why did our book value of equity go from 3 billion to 2 billion?

So we have 5,350,000 of equity.

I still have 750,000 of equity.

So I have 750,000 of equity.

Equity kind of takes all of the risk.

So they're saying essentially that the market cap, and that's equivalent to the market value of the equity, or what the market thinks the equity is worth, that's 1 times 500 million shares.

When you take some of your assets and you get the value of the assets that you think they're worth and you pay off some liabilities, it doesn't change the value of your equity.

So we have 5 million of equity.

So you have 2 billion of equity.