Question

The owners of a corporation are the . The primary goal of the corporate management team is to the shareholders’ wealth by the over the long run. Krit Corp. is a US manufacturing company based in the Midwest. As an investor, Wilson bought 200 shares of stock in Krit Corp. The stock price of Krit Corp. is currently trading at $37.50 per share. Wilson’s total wealth in Krit Corp. is:

Answer 1

Total wealth = $7,500

Step-by-step explanation:

The primary goal of financial management is to increase and maximize the wealth of the shareholders of the corporation.

This wealth is measured and represented by the share price, which is the measured of how much the company is worth at any time.

The higher the share price , hence the higher the value of the company and the higher the wealth of the shareholder.

Wilson's total wealth will be equal to the share price multiplied by the number of units

Total wealth = $37.50 per share × 200

= $7,500

Total wealth = $7,500