Based on the corporate valuation model, the total corporate value of Chen Lin Inc. is $1,275 million. Its balance sheet shows $280 million in notes payable, $230 million in long-term debt, $50 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 10 million shares of stock outstanding, what is the best estimate of its stock price per share? a. $57.50 b. $65.00 c. $76.50 d. $71.50 e. $99.50

Based on the corporate valuation model, the total corporate value of Chen Lin Inc. is $1,275 million. Its balance sheet shows $280 million in notes payable, $230 million in long-term debt, $50 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 10 million shares of stock outstanding, what is the best estimate of its stock price per share? a. $57.50 b. $65.00 c. $76.50 d. $71.50 e. $99.50

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 7P

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