Answer:
11,875,000 common shares outstanding
Step-by-step explanation:
The number of common shares outstanding of Harper industries is determined by the company's common equity added to its MVA and then divided by the stock price per share.
If common equity is $900 million, MVA is $50 million and the price per share is $50, the number of shares outstanding is:
[tex]n=\frac{900,000,000+50,000,000}{80}\\n=11,875,000[/tex]
Answer:
N = 11,875,000
Therefore, the number of common shares that are currently outstanding is 11,875,000
Step-by-step explanation:
Oustanding shares can be defined as the company's stock currently held by all its shareholders, it also including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. The outstanding common shares can be defined mathematically with the equation below.
MVA = (P ×N) - BV .....1
Where;
MVA = market value added
P = price per share
N = Number of outstanding shares
BV = balance sheet value of common equity
From equation 1, we can make N the subject of formula.
N = (MVA + BV)/P .....2
Since;
MVA = $50,000,000
BV = $900,000,000
P = $80
Substituting into equation 2
N = (50,000,000 + 900,000,000)/80
N = 11,875,000
Therefore, the number of common shares that are currently outstanding is 11,875,000
