Given the following information, what is the value of XYZ Corporation?

Common Stock: 14. 2 million shares outstanding, price = $35 per share
Bond Issue 1: $500 million total face value, price = 102% of face value
Bond Issue 2: $175 million total face value, price = $850 per bond

Question

Given the following information, what is the value of XYZ Corporation?

Common Stock: 14. 2 million shares outstanding, price = $35 per share
Bond Issue 1: $500 million total face value, price = 102% of face value
Bond Issue 2: $175 million total face value, price = $850 per bond

Quizplus · Accepted Answer

The value of XYZ Corporation can be calculated by adding the value of its common stock and the value of its bond issues. - The value of the common stock is calculated as 14.2 million shares * $35 per share = $497 million.- The value of Bond Issue 1 is 102% of its face value, which is $500 million * 102% = $510 million.- The value of Bond Issue 2 is given per bond, so we need to calculate the number of bonds first. Since the total face value is $175 million and it's common for bonds to have a face value of $1,000 (implied by the price being $850 "per bond"), there are 175,000 bonds ($175 million / $1,000). The value of Bond Issue 2 is 175,000 bonds * $850 = $148.75 million.Adding these values together gives the total value of XYZ Corporation as $497 million + $510 million + $148.75 million = $1,155.75 million.

Given the Following Information, What Is the Value of XYZ