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Falak Naz
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.