Value of operations: $950 million Excess cash: $30 million $40 million $30 million Inventory: A/P and accruals: Short-term debt Long-term debt: $70 million What is the value of equity for this firm? $50 million

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
Problem 2.2CE
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You have obtained the following estimates from an analyst. Based on these numbers, what is the equity value of the
firm?
Value of operations: $950 million
Excess cash:
$30 million
$40 million
$30 million
Inventory:
A/P and accruals:
Short-term debt
Long-term debt:
$70 million
What is the value of equity for this firm?
$50
million
Transcribed Image Text:You have obtained the following estimates from an analyst. Based on these numbers, what is the equity value of the firm? Value of operations: $950 million Excess cash: $30 million $40 million $30 million Inventory: A/P and accruals: Short-term debt Long-term debt: $70 million What is the value of equity for this firm? $50 million
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