Based on the Corporate Valuation Model,the Value of a Company's

question 16

Multiple Choice

Based on the corporate valuation model,the value of a company's operations is $900 million.Its balance sheet shows $70 million in accounts receivable,$50 million in inventory,$30 million in short-term investments that are unrelated to operations,$20 million in accounts payable,$110 million in notes payable,$90 million in long-term debt,$20 million in preferred stock,$140 million in retained earnings,and $280 million in total common equity.If the company has 25 million shares of stock outstanding,what is the best estimate of the stock's price per share?

• A)$23.00
• B)$25.56
• C)$28.40
• D)$31.24

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Definitions:

Nicotine

An addictive substance found in tobacco, acting as a stimulant in low doses and a relaxant in higher doses, affecting the nervous system.

Nectaries

Glandular structures in flowers or leaves that secrete nectar, attracting pollinating animals or insects.

Germination

The process by which a plant grows from a seed, involving the emergence of a seedling after a period of dormancy.

Internal and Environmental Factors

Variables or influences from within an organism and its external environment that affect its behavior, development, or survival.