Question

We know the following about Alloy and Brant (A&B). Total assets are $220m, D is $140m, E is $60m, preferred stock of $20m, cash is $100m and the # of shares is 1m. We estimate that the market value of equity is 2 times the book value of it. Finally, a fire sale of the firm would bring 30% of the value to the company. Compute the book value, liquidation value, replacement value and enterprise value per share of A&B.

Answer 1

	Total assets	220	$ in million
Less:	Liability
	Debt	140	$ in million
	prrferred stock	20	$ in million
	Net worth to common stock	60	$ in million
	No. common stock	1	million
	Book Value per share	60	$
	Replacement value per share	120	$
	Enterprice value
	Market value of Common stock	120	$ in million
Add:	Market value of Debt	140	$ in million
	Market value of preferred stock	20	$ in million
Less:	Cash & Cash equivalent	100	$ in million
		180
	No. common stock	1	million
	Enterprice value per share	180	$
	Liquidation value per share	36