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Balsco's balance sheet shows total assets of $238,000 and total liabilities of $107,000. The firm has 55,000 shares of stock outstanding that sell for $11 a share. What is amount of market value added?
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Balsco's balance sheet shows total assets of $238,000 and total liabilities of $107,000. The firm has 55,000 shares of stock outstanding that sell for $11 a share. What is amount of market value added?

User Bobmcn
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1 Answer

6 votes

Answer:

$ 474000

Step-by-step explanation:

Market value added = V - K where V is the market value of the firm plus its equity and debts = (55000 × $ 11) + $ 107000 = $ 712000

K is the capital invested which in this case represent the total assets = $ 238000

Market value added = $ 712000 - $ 238000 = $ 474000

User Arsanyf
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