Based on the Corporate Valuation Model,Morgan Inc

question 27

Multiple Choice

Based on the corporate valuation model,Morgan Inc.'s total corporate value is $200 million.The balance sheet shows $90 million of notes payable,$30 million of long-term debt,$40 million of preferred stock,and $100 million of common equity.The company has 10 million shares of stock outstanding.What is the best estimate of the stock's price per share?

• A) $3.80
• B) $3.36
• C) $3.88
• D) $4.00
• E) $4.12

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Definitions:

Existing Copier

A copier machine that is currently owned or in use within an organization.

Evaluation

The process of examining and judging something's value, quality, or importance.

Net Working Capital

Net Working Capital is a measure of a company's short-term financial health, calculated as current assets minus current liabilities.

Present Value

The contemporary valuation of future financial inflows or a lump sum, adjusted for a specific rate of return.