million in accounts receivable, $ 60 million in inventory, and $ 100 million in short-term investments that are unrelated to operations. The balance sheet also shows $ 90 million in accounts payable, $ 120 million in notes payable, $ 300 million in long-term debt, $ 50 million in preferred stock, $ 180 million in retained earnings, and $ 800 million in total common equity. If the company has 30 million shares of stock outstanding, what is the best estimate of the stock’ s price per share?
a. $ 24.90 b. $ 27.67 c. $ 30.43 d. $ 33.48 e. $ 36.82
4. Based on the corporate valuation model, the value of a company’ s operations is $ 900 million. Its balance sheet shows $ 70 million in accounts receivable, $ 50 million in inventory, $ 30 million in short-term investments that are unrelated to operations, $ 20 million in accounts payable, $ 110 million in notes payable, $ 90 million in long-term debt, $ 20 million in preferred stock, $ 140 million in retained earnings, and $ 280 million in total common equity. If the company has 25 million shares of stock outstanding, what is the best estimate of the stock’ s price per share?
a. $ 23.00 b. $ 25.56 c. $ 28.40 d. $ 31.24 e. $ 34.36