Construct a Market Value Balance Sheet for Trump Toppers, Inc_ (TT), manufacturer of custom-made hairpieces, given the following data (FYI: There are no other liabilities or stock issues other than those mentioned below.): (parts a,b,c) a.)
The company has issued 51,000 face value bonds that will mature in 6 years with a total book value of 531,000,000. The coupon rate on the bond is 6.0%, but market interest rate on similar bonds is now 4.0%. What is the market value of these bonds?
b.) The company also has 8.000.000 shares of common stock outstanding. The company's earnings are expected to be 512 per share and it plans to pay out 35% of its earnings to its shareholders. Meanwhile, its return on invested funds (ROE) is estimated at 17% and, given the riskiness of the stock, the required rate of return is 15%. Calculate the price per share and the market value of the total equity position.
c.) The book value of assets in place (plant and equipment) is $492,000,000. Indicate the value of investment opportunities.