contestada

Uptown Interior Designs is an all-equity firm that has 40,000 shares of stock outstanding. The company has decided to borrow $74,000 to buy out the 2,100 shares of a deceased stockholder. What is the total value of this firm if you ignore taxes

Respuesta :

tutordamola

Answer:

The answer is $1,409,600

Explanation:

Value of firm also known as enterprise value is the value of a company at a particular point in time.

The firm value can be calculated by multiplying the total number of shares outstanding by the current share price of the firm.

In this question, the price of the borrowed fund is:

$74,000/2,100shares

=$35.24

Therefore, total value of the firm is

40,000 outstanding shares x $35.24 = $1,409,600

Please note that $1,409,600 has been rounded up.

Otras preguntas