1. The value of book equity is $100 million. The debt is $40 million. Analysts believe that if the firm needed to sell its assets quickly, it would lose 65% of their value. Also, they estimate that the increase in the price of assets is about 25% more than the book value. If the firm has 1 million shares, how much are the liquidation value, book value, and replacement value per share?
2. It would help me a lot if you can please show your work step by step and in detail. Please provide explanation if necessary. The reason I ask is because I really want to make sure if my approach is correct. I seem to be confused with this problem.