Byrd Lumber has 2 million shares of stock outstanding. On the balance sheet the company has $40 million worth of common equity. The company's stock price is $15 a share. What is the company's Market Value Added (MVA)?

Question

Quizplus · Accepted Answer

The Market Value Added (MVA) is calculated as the difference between the market value of the company's equity and the book value of its equity. The market value of equity is 2 million shares * $15 = $30 million. The book value of equity is $40 million. Therefore, MVA = $30 million - $40 million = -$10 million.

Byrd Lumber Has 2 Million Shares of Stock Outstanding