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Value of equity

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

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

$2.19