Question

Hayes Corporation has $300 million of common equity on its balance sheet and 6 million shares of common stock outstanding. The company's Market Value Added (MVA) is $162 million. What is the company's stock price?

Answer 1

Answer: $77

Explanation:

Given the following;

Total Book value of common equity = $300,000,000

Total outstanding shares = 6,000,000

Market Value Added (MVA) = $162,000,000

Stock price =( Market value of equity + Total Book value of equity) ÷ Number of outstanding shares

Stock price = ($162,000,000 + $300,000,000) ÷ 6,000,000

Stock price = $462,000,000 ÷ 6,000,000

Stock price = $77

Company's stock price is $77