Pennzoil (now PennzEnergy Corporation), the oil company, has a substantial holding of Chevron Corporation, another oil company. But the holding (of 7.1 million shares at the end of 1998) is less than 20 percent of Chevron. The Chevron shares are classified as available for sale, so are carried at fair value on the balance sheet, with income recognize as dividends received plus unrealized gains or losses on the investments. PennzEnergy reported the following for1998 (in thousand):
Dividend income ...... 134,026
Unrealized gains on securities .. 36,373

In its fair-value footnote the company gave the following information (in thousands):

Outline how you would incorporate these numbers in a valuation ofPennzEnergy.

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Estimated Fair Value Accumulated Unrealized Gains $349,381 Cost Investment in Chevron Corporation $238,847 $588,228