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Falak Naz, Accountant
Category: Finance
Satisfied Customers: 532
Experience:  I am a qualified Chartered Accountant. Currently i am working in financial institution.
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# Based on the corporate valuation model, Hunsaders value of

### Customer Question

Based on the corporate valuation model, Hunsader's value of operations is \$300 million. The balancer sheet shows \$20 million of short-term investments that are unrelated to operations, \$50 million of accounts payable, \$90 million of notes payable, \$30 million of long-term debt, \$40 million of preferred stock, and \$100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?
Submitted: 7 years ago.
Category: Finance
Expert:  Falak Naz replied 7 years ago.

Assuming that book values of debt are close to market values of debt, the total market value of the company is:

= \$300 + \$20 = \$320 million.

Market value of equity = Total market value - Value of debt

= \$320 - (Notes payable + Long-term debt + Preferred stock)

= \$320 - (\$90 + \$30 + \$40) = \$160 million.

Price per share = Market value of equity / Number of shares

= \$160 / 10 = \$16

Customer: replied 7 years ago.
Thank you for your answer but I needed it on 12/2 not 24 hours later 12/3.