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    Hunsader's Value of Operations

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    Based on the corporate valuation model, Hunsader's value of operations is $300 million. Here is what the balance sheet shows:
    - $20 million of short-term investments, unrelated to operations
    - $50 million of accounts payable
    - $90 million of notes payable
    - $30 million of long-term debt
    - $40 million of preferred stock
    - $100 million of common equity.
    Hunsader's has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?

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    Solution Preview

    Step 1: To find the corporate value
    =Value of Operations + Value of Non ...