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    Value of equity

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    Problem:

    The balance sheets of Hutter Amalgamated are shown below. If the 12/31/2005 value of operations is $756 million, what is the 12/31/2005 value of equity?

    [ANSWER: $416 MILLION] *
    [Please show the computing steps by which the answer to this problem was derived].

    Balance Sheets, December 31, 2005 (Millions of Dollars)

    Assets Liabilities and Equity

    Cash $20.0 Accounts payable $19.0
    Marketable Securities 77.0 Notes payable 151.0
    Accounts receivable 100.0 Accruals _51.0
    Inventories _ 200.0 Total current liabilities $221.0
    Total current assets $397.0 Long-Term bonds 190.0
    Net plant and equipment _279.0 Preferred stock 76.0
    Common stock (par plus PIC) 100.0
    Retained earnings 89.0
    Common equity $189.0
    Total assets _$676.0 Total liabilities and equity _$676.0

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    Solution Preview

    Total Value of the company =value of operations +value of non operating ...

    Solution Summary

    The solution explains how to calculate the value of equity

    $2.49

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