FUND.OF CORP.FINANCE PKG. F/BU >C<
FUND.OF CORP.FINANCE PKG. F/BU >C<
16th Edition
ISBN: 9781323165997
Author: Berk
Publisher: PEARSON C
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Chapter 10, Problem 5P
Summary Introduction

Enterprise Value:

The enterprise value is the measurement of total value of a firm’s equity or theoretical value in order to take over its operations by paying all its debts and cash. It is calculated by subtracting total cash and cash equivalents in the summation of market value of equity and debt.

Share Price:

Share price is the highest amount an investor is willing to pay for a single share from a number of saleable stocks of a firm. It can be calculated by the formula given below:

FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 10, Problem 5P , additional homework tip  1

In the given formula, FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 10, Problem 5P , additional homework tip  2is enterprise value or present value of expected free cash flows and FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 10, Problem 5P , additional homework tip  3is price of the share.

(a)

To determine:

The enterprise value of HM Corporation.

(b)

Summary Introduction

To determine:

The share price of HM Corporation.

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FUND.OF CORP.FINANCE PKG. F/BU >C<

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