Final answer:
The estimated value of operations for the firm considering buying a privately owned competitor is calculated by adding the market value of equity ($1,007,042.64 million) to the debt ($551,219 million) and the value of preferred shares ($50,263 million), totaling $1,608,524.64 million.
Step-by-step explanation:
To estimate the value of operations for a firm considering buying a privately owned competitor, we can calculate the enterprise value, which includes the market value of equity plus debt, less any cash or cash equivalents. In this case, we're given the estimated price per share ($70.41), the amount of debt ($551,219 million), the value of preferred shares ($50,263 million), and the number of shares outstanding (14,304). First, we find the market value of equity by multiplying the price per share by the number of shares outstanding:
Market Value of Equity = Price per Share x Number of Shares Outstanding = $70.41 x 14,304 shares = $1,007,042.64 million
Next, to find the estimated value of operations, we add the market value of equity to the debt, and the value of preferred shares:
Estimated Value of Operations = Market Value of Equity + Debt + Preferred Shares = $1,007,042.64 million + $551,219 million + $50,263 million = $1,608,524.64 million
This number represents the total estimated value of the firm's operations.