<u>Calculation of number of common shares currently outstanding:</u>
It is given that Henderson industries has $500 million of common equity on its balance sheet; its stock price is $60 per share; and its market value added (mva) is $130 million.
We can use MVA formula to calculate the number of common shares currently outstanding as follows:
MVA = (Total Shares Outstanding × Current Market Price) − Total Common Equity
130,000,000 = (Total Shares Outstanding x 60)-500,000,000
(Total Shares Outstanding x 60)= 130,000,000 + 500,000,000
Total Shares Outstanding x 60= 630,000,000
Hence,
Total Shares Outstanding = 630,000,000 /60 = 10,500,000
Hence, the number of common shares currently outstanding are <u>10,500,000 shares</u>.
