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Memphic Memphic
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6 years ago
Louie's Truck Repair has assets with a market value of $8000.  The company has three types of securities: equity, $2500 of debt, and 100 warrants that are fairly priced at $20 each.  What is the value of Louie's equity?
A) $5430
B) $12,500
C) $10,500
D) $3500
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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wrote...
6 years ago
D
Explanation:  D) Equity value = Assets - debt - warrants
= $8000 - $2500 - ($20 × 100) = $3500
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