The problem provides financial information about Sheng, Inc. and asks to calculate: a) Market value of the stock b) Book value per share c) Liquidation value per share The provided information includes: * Stock price: $70 per share * Total assets: $1,100,000 * Total liabilities (including preferred stock): $315,000 * Shares of common stock outstanding: 13,000 * Liquidation value of assets: $830,000

1. Problem Description

The problem provides financial information about Sheng, Inc. and asks to calculate:

a) Market value of the stock

b) Book value per share

c) Liquidation value per share

The provided information includes:

* Stock price: $70 per share

* Total assets: $1,100,000

* Total liabilities (including preferred stock): $315,000

* Shares of common stock outstanding: 13,000

* Liquidation value of assets: $830,000

2. Solution Steps

a) Market Value of the Stock

The problem states that the stock currently sells for $70 per share. Therefore, the market value per share is simply the given stock price.

b) Book Value per Share

Book value per share is calculated as (Total Assets - Total Liabilities) / Number of Shares Outstanding.

Total Equity = Total Assets - Total Liabilities

$Total Equity =$1,100,000 - $315,000 =$785,000$

Book Value per Share = Total Equity / Number of Shares Outstanding

$Book Value per Share =$785,000 / 13,000 = $60.38$ (rounded to two decimal places)

c) Liquidation Value per Share

Liquidation value per share is calculated as (Liquidation Value of Assets - Total Liabilities) / Number of Shares Outstanding. Note that the problem states "total liabilities, including preferred stock", which is $315,

0

0

0. This needs to be subtracted from the liquidation value of assets to determine the value attributable to common shareholders during liquidation.

Value available to common shareholders = Liquidation Value of Assets - Total Liabilities

$Value available to common shareholders =$830,000 - $315,000 =$515,000$

Liquidation Value per Share = Value available to common shareholders / Number of Shares Outstanding

$Liquidation Value per Share =$515,000 / 13,000 = $39.62$ (rounded to two decimal places)

3. Final Answer

a) Market value of the stock: $70

b) Book value per share: $60.38

c) Liquidation value per share: $39.62