- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 24. Residual Income Valuation
- Subject 2. Commercial Implementations of the Residual Income Concept
CFA Practice Question
Consider the following information:
- Total capital: $500 million. There is no debt.
- Closing stock price: $12.
- Total number of shares outstanding: 50 million.
Calculate the MVA for the fiscal period.
Correct Answer: MVA = Market value of the company - Total Capital = $12 x 50 million - $500 million = $100 million.
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