dine on equity this evening

a company has operating assets of $720 million. they have short-term cash and securities with a market value of $60 million. the noncurrent investments have a book value of 30 mil and a mkt value of 45 mil. the company also has an overfunded pension plan, with plan assets of 210 mil and liabilities of 170 mil. it also has 215 mil of notes and bonds outstanding and 100 million shares outstanding. what is the value per share of this company?

6.5 dollars/share? Where is this from?

should book value or market value be used for the non-current investments component? if market value then 6.5… seriously - which place in equity is this from???

pg 415 equity reading 42 of the text that is actually administering the exam, q # 17. good work gents- i guessed and got it right using the mkt value part but wasn’t certain. this q seemed a bit random in the slew of FCFF/FCFE q’s so figured i’d toss it up here for fun.

the price of a company should be intrinsically worth the fair market value of its balance sheet or higher. This is the kind of thing Buffett looked for in his early days and managers like Marty Whitman look for today!

when u r calculating book value per share why should non current assets should be valued at their market value, instead of book value

I’d say as a general rule, always use mkt value. In the absence of mkt value, use book.