Based on the Corporate Valuation Model,Wang Inc

question 71

Multiple Choice

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

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Definitions:

Condition Subsequent

A condition subsequent is a condition in a contract that, when met, terminates an existing obligation under the contract, as opposed to initiating it.

Breach Of Contract

The failure to perform any term of a contract, written or oral, without a legitimate legal excuse.

Cause Of Action

A cause of action is a set of facts sufficient to justify a right to sue to obtain money, property, or the enforcement of a right against another party.

Anticipatorily Repudiated

A doctrine in contract law where one party, ahead of time, indicates that they will not fulfill their contract obligations, allowing the other party to treat the contract as breached.