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Question 28
Based on the corporate valuation model, the value of a company’s
operations is $1,200 million. The company’s balance sheet shows $80
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?
Question 29
Which of the following is NOT normally regarded as being
a barrier to hostile takeovers?
Question 30
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?
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FIN 534 Week 9 Chapter 16 Solution