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25 February, 14:18

At year end, Rebos Company's financial statements showed sales of $820 million, net income of $425 million, total assets of $750 million, total liabilities (including preferred stock) of $735 million, and 1.20 million shares of common stock outstanding. Rebos has been offered $742.50 million to sell their assets. Based on this information, calculate the company's book value per share and liquidation value per share of common stock, respectively.

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  1. 25 February, 17:34
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    total sales $820 million

    net income $425 million

    total assets $750 million

    total liabilities $735

    1.2 million outstanding common stocks

    an offer was made to buy their assets at $742.5 million

    company's book value per share:

    = (total assets - total liabilities) / total number of outstanding common stocks

    = ($750,000,000 - $735,000,000) / 1,200,000 = $12.50 per stock

    company's liquidation value per share:

    = (total offer - total liabilities) / total number of outstanding common stocks

    = ($742,500,000 - $735,000,000) / 1,200,000 = $6.25 per stock
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