Question

Krit corporaton is a US manufacturing company based in the Midwest. As an investor, Wilson bought 225 shares of stock in Krit Corp. The stock price of Krit is currently trading at $45 per share. Wilson's total wealth in Krit Corp is? If the stock price of Krit Corp increases in the next 2 years, Wilson's wealth in in Krit Corp will (increase or decrease)?

Answer 1

The correct answer is $10,125 and increase in wealth.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Total shares bought = 225 shares

Current stock price = $45

So, we can calculate Wilson's total wealth in Krit Corp. by using following method:

Total wealth = Total shares bought × Current stock price

= 225 × $45

= $10,125

Hence, the total wealth of Wilson is $10,125.

Wilson wealth will increase because if the company stock price increase Wilson's stock price also increase, which results in increase of wealth.