HH has $300M in common equity, with 5M shares outstanding. IF its MVA is $200M what...

HH has $300M in common equity, with 5M shares outstanding. IF its MVA is $200M what is the company's stock price?

Expert Solution

Answer:- $100 per Share

Explanation:- Market value added (MVA) is a calculation that shows the difference between the market value of a company and the capital contributed by all investors

So, MVA = Current value of the company on the market - Contributions made by its investors

$200 Million = Current value of the company on the market - $300 Million

$200 Million + $300 Million = Current value of the company on the market

$500 Million = Current value of the company on the market

So, Company's stock price = Current value of the company on the market / Number of shares outstanding

= $500 Million / 5 Million

= $100 per Share

jeff jeffy answered 2 years ago

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