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Travka [436]
3 years ago
11

Based on the corporate valuation model, gray entertainment's total corporate value is $1,150 million. the company's balance shee

t shows $120 million of notes payable, $300 million of long-term debt, $50 million of preferred stock, $180 million of retained earnings, and $800 million of total common equity. if the company has 30 million shares of stock outstanding, what is the best estimate of its price per share?
Business
1 answer:
vagabundo [1.1K]3 years ago
5 0

Answer:

$26.67 million

Explanation:

The computation of price per share is shown below:-

Total market value = $1,150 million + $120 million

= $1,270 million

Market value of equity = Total market value - value of debt - value of preferred stock

= $1,270 million - ($120 million + $300 million + $50 million)

=  $1,270 million - $470 million

= $800 million

Price per share = Market value of equity ÷ Stock outstanding

= $800 million ÷ $30 million

= $26.67 million

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Both of these factors will help in increasing the level of production. In other words, we can say that the outward shift in the production possibility curve shows economic growth.

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