Luther Corporation
Consolidated Balance Sheet
December 31, 2006 and 2005 (in $ millions)

Refer to the balance sheet above. If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then what is Luther's enterprise value?
A) -$540.0 million
B) $771.4 million
C) $385.7 million
D) $521.4 million

Question

Luther Corporation
Consolidated Balance Sheet
December 31, 2006 and 2005 (in $ millions)

Refer to the balance sheet above. If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then what is Luther's enterprise value?
A) -$540.0 million 
B) $771.4 million 
C) $385.7 million 
D) $521.4 million

Quizplus · Accepted Answer

C) Enterprise value = Market Value of Equity + Debt - Cash = (10.2 × $16) + $278.6 - $56.1 = $385.7

Luther Corporation Consolidated Balance Sheet