You have been asked to value shares of Yahoo (YHOO) using a sum-of-the-parts framework. In addition to its core business, Yahoo owns equity stakes in two separate, publicly-traded companies: Yahoo Japan and Alibaba Group Holding Ltd.

You elect to estimate the value of Yahoo shares as the sum of the following components:

• The value of the equity of Yahoos core business;

• The market value of Yahoos 35% equity stake in Yahoo Japan;

• The market value of Yahoos 16.3% equity stake in Alibaba Group Holding Ltd.

  You gather the following information on Yahoo and its equity investments in Yahoo Japan and Alibaba:

• Yahoo is currently trading for $49.41;

• EBITDA from Yahoos core business for the most recent year was $0.6 billion;

• The total market capitalization of Yahoo Japan is $22 billion;

• The total market capitalization of Alibaba is $263 billion;

• Yahoo has net cash of $10 billion on its balance sheet;

• Yahoo has 0.947 billion shares outstanding.

  To estimate the value of the equity of Yahoos core business, you apply an 8x multiple to Yahoos EBITDA for the most recent year, and then add the companys net cash (cash debt) position.

  4.) What is the value of the total equity of Yahoos core business? (2 points)

  5.) What is the combined market value of Yahoos stakes in Yahoo Japan and Alibaba? (1 point)

  6.) Using your answers to questions 4 and 5, what is the per-share value of Yahoo shares based on a sum-of-the-parts valuation methodology? (2 points)