Determining a Firm's Stock Price per Share
Not what you're looking for?
After applying the corporate valuation model, the value of a firm's operations is found to be $400 million. The balance sheet shows $20 million in short-term investments that are not related to operations. The balance sheet also shows $50 million in accounts payable, $90 million in notes payable, $30 million in long-term debt, $40 million in preferred stock, and $100 million in total common equity.
If the company has 10 million shares of stock, what is the best estimate for the firm's stock price per share?
Purchase this Solution
Solution Summary
The best estimate for the firm's stock price per share is made given the balance sheet figures for short-term investments, accounts payable, notes payable, long-term debt, preferred stock, and total common equity and the number of shares outstanding. This solution shows calculations in plain text and in the attached Excel file.
Solution Preview
See the attached Excel document.
After applying the corporate valuation model, the value of a firm's operations is found to be $400 million.
The balance sheet shows $20 million in short-term investments that are not related to operations. The balance sheet also ...
Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance
This quiz test introductory finance topics.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.