The founder of Alchemy Products Inc. discovered a way to turn gold into lead and

Question

The founder of Alchemy Products Inc. discovered a way to turn gold into lead and patented this new technology. He then formed a corporation and invested $600,000 in setting up a production plant. He believes that he could sell his patent for $25 million. o. What is the book value of the firm? (Enter your answer in dollars not in millions.) Book value S 600,000 b. What is the market value of the firm? (Enter your answer in dollars not in millions.) Market value c. If there are two million shares of stock in the new corporation, what would be the price per share? (Round your answer to 2 decimal places.) Price per share d. What would be the book value per share? (Round your answer to 2 decimal places.) Book value per share

Explanation / Answer

Market Value shall be sum of production plant cost and sale value of patent:
=$25,000,000+$600,000=$25,600,000

Price per share =$25,600,000/2,000,000=$12.80

Book Value per share =600,000/2,000,000= $0.30

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