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Answer :
To find the company's stock price, we need to use the information given to us about the company's common equity and its Market Value Added (MVA).
The formula to calculate the Market Value of Equity (MVE) using the Market Value Added is:
[tex]\text{MVE} = \text{Common Equity} + \text{MVA}[/tex]
Given:
- Common Equity = ₹100 crores
- MVA = ₹24 crores
Plug these values into the formula:
[tex]\text{MVE} = 100 + 24 = 124 \text{ crores}[/tex]
Next, we need to find the stock price. The Market Value of Equity is also equal to the stock price multiplied by the number of shares.
The formula is:
[tex]\text{Stock Price} = \frac{\text{MVE}}{\text{Number of Shares}}[/tex]
Given:
- Number of Shares = 50 lakhs (which is equivalent to 0.5 crores)
Plug the values into the formula:
[tex]\text{Stock Price} = \frac{124}{0.5} = 248[/tex]
Therefore, the stock price of the company is ₹248.
The correct multiple-choice option is (C) 248.
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