(Valuation of holding company) OwnItAll (OIA) is a holding company whose sole business is to own a portfolio of shares. The company has 200 million shares outstanding, listed on the Portland Stock Exchange.

a. Given the current portfolio of OIA, what should be it’s share price?

(There’s a template on the companion website at http://global.oup

.com/us/benninga.)

b. The actual market price of OIA’s shares is $25 per share. What can you conclude from this fact?

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A 1 B C OIA PORTFOLIO Number of Share 2 Stock shares price 3 IBM 1,500,000 92.89 4 Ahold 5,250,000 8.23 5 Kellogg 385,259 45.29 6 General Motors 12,000,000 36.64 7 Microsoft 1,000,000 26.18 8 AT&T 98,000,000 19.89 9 SBC 12,000,000 23.42 10 Merck 15,000,000 28.02 11 Nicor 2,000,000 36.42 12 Duke Power 25,000,000 26.14