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16 February, 22:27

Harper Industries has $800 million of common equity on its balance sheet; its stock price is $20 per share; and its market value added (MVA) is $120 million. How many common shares are currently outstanding? Write out your answer completely. For example, 5 million shares should be entered as 5,000,000. Round your answer to the nearest whole number, if necessary.

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  1. 16 February, 22:31
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    Common shares outstanding = 40,000,000

    Explanation:

    We will calculate as follows:

    Common shares outstanding = common equity / price per share

    Common shares outstanding = 800,000,000 / 20

    Common shares outstanding = 40,000,000

    The market value added (MVA) is not taken into account because it's an amount that came from the market and not from the relationship between the company and the owners
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