Based on the free cash flow valuation model, Bizzaro Co.'s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. Bizzaro has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?
A. $13.72
B. $14.44
C. $15.20
D. $16.00
E. $16.80
Answer: D
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Three weeks ago, you sent a proposal to a client who had asked for information on upgrading his company's security system. You've heard nothing in response. You should
A) inquire politely as to whether the report arrived and offer to answer any questions regarding its subject. B) take it as a sign that the client agrees with what you had to say. C) assume that the report has not been read. D) call the client and demand to know why you haven't received a response yet. E) call the client's office, give a fictional reason for calling, and then casually ask about the report as if you had forgotten about it, as well.
The controller at Business Services Consulting needs new computers for the accounting department. However, there are no guidelines specifying whether the controller can approve purchases of office equipment. Which internal control procedure needs strengthening?
A) assignment of responsibilities B) competent, reliable, and ethical personnel C) separation of duties D) documents
Answer the following statements true (T) or false (F)
There is a movement in accounting policy toward fair or current values on the balance sheet.
Emotive customers are frank, demanding, serious, and opinionated
Indicate whether the statement is true or false