It is April 4, 2011, and your company is considering the possibility of purchasing the Chrysler automobile

Question:

It is April 4, 2011, and your company is considering the possibility of purchasing the Chrysler automobile manufacturing business. The private equity investors who own Chrysler have hinted that they might be interested in selling the firm. Since Chrysler does not have publicly traded shares of its own, you have decided to use Ford Motor Company as a comparable company to help you determine the market value of Chrysler.
This morning, Ford’s was trading at $16.69 per share, and the company had 3.47 billion shares outstanding. You estimated that the market value of all of the company’s other outstanding securities (excluding the but including special shares owned by the Ford family) is $100 billion and that its revenues from auto sales were $133.4 billion last year. Chrysler’s revenue in 2010 was $50.0 billion. Based on the enterprise value/revenue ratio, what is the total value of Chrysler that is implied by the Ford market values?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...