Based on the corporate valuation model,Gray Entertainment's total corporate value is $1,150 million.The company's balance sheet 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?

Question

Quizplus · Accepted Answer

Assuming that the book value of debt is close to its market value,the total market value of the firm's equity is: 11ea856c_8bb5_2d31_9aec_b7fd4460b82c_TB1222_00 Stock price = Value of equity/Shares outstanding = $22.67
The book value of equity figures are irrelevant for this problem.

Based on the Corporate Valuation Model,Gray Entertainment's Total Corporate Value