Blunderbluss Manufacturing’s balance sheets report $200 million in total debt, $70 million in short-term investments, and $50 million in preferred stock. Blunderbluss has 10 million shares of common stock outstanding. A financial analyst estimated that Blunderbuss’s value of operations is $800 million. What is the analyst’s estimate of the intrinsic stock price per share?
Blunderbluss Manufacturing’s
Data given::
Total debt = $200 million
Short-term investments = $70 million
Preferred stock = $50 million
No. of shares outstanding = 10 million
value of operations = $800 million
Required:: Intrinsic stock price per share?
Formula to be used :
Value of operations = Value of equity + Value of debt + Value of preferred stock -Value of short term investment.
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