Question

A firm has non-current assets with a book value of $600 and an appraised market value...

A firm has non-current assets with a book value of $600 and an appraised market value of about $900. Net working capital is $500 on the books, but approximately $800 would be realized if all the current accounts were liquidated. The firm has $550 in long-term debt, both book value and market value. What is the book value of the equity? What is the market value?

Homework Answers

Answer #1
BOOK VALUE BALANCE SHEET
Non current assets $             600.00
NWC $             500.00
Total long term liabilities+Equity $ 1,100.00
Long term debt $             550.00
Book value of equity $             550.00
MARKET VALUE BALANCE SHEET
Non current assets $             900.00
NWC $             800.00
Total long term liabilities +Equity $ 1,700.00
Long term debt $             550.00
Market value of equity $ 1,150.00
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