Based on the Corporate Valuation Model,the Value of Weidner Co

question 49

Multiple Choice

Based on the corporate valuation model,the value of Weidner Co.'s operations is $1,200 million.The company's balance sheet shows $80 million in accounts receivable,$60 million in inventory,and $100 million in short-term investments that are unrelated to operations.The balance sheet also shows $90 million in accounts payable,$120 million in notes payable,$300 million in long-term debt,$50 million in preferred stock,$180 million in retained earnings,and $800 million in total common equity.If Weidner has 30 million shares of stock outstanding,what is the best estimate of the stock's price per share?

• A) $24.90
• B) $27.67
• C) $30.43
• D) $33.48
• E) $36.82

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Definitions:

Demand Curve

A graphical representation that shows the relationship between the quantity of a good or service consumers are willing and able to purchase and its price.

Excess Demand

A market condition where the quantity demanded of a good exceeds the quantity supplied at a given price, often leading to price increases.

Supply

The total quantity of a good or service that the market can offer.

Demand

The amount of a product or service that consumers are willing and able to purchase at various prices during a specified period.