Based on the Corporate Valuation Model, Gay Entertainment's Value of Operations

question 53

Multiple Choice

Based on the corporate valuation model, Gay Entertainment's value of operations is $1,200 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?

• A) $21.90
• B) $24.33
• C) $26.77
• D) $29.44
• E) $32.39

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