Based on the corporate valuation model,Wang Inc.'s total corporate value is $750 million.Its balance sheet shows $100 million notes payable,$200 million of long-term debt,$40 million of common stock (par plus paid-in-capital),and $160 million of retained earnings.What is the best estimate for the firm's value of equity,in millions?
A)$386
B)$406
C)$428
D)$450
E)$473

Question

Quizplus · Accepted Answer

The firm's value of equity is calculated by subtracting the total debt (notes payable and long-term debt) from the total corporate value. Thus, $750 million - ($100 million + $200 million) = $450 million.

Based on the Corporate Valuation Model,Wang Inc