Shareholder wealth would be:
A)assets plus liabilities
B)assets minus liabilities
C)common stock price times number of shares outstanding
D)none of the above

Question

Quizplus · Accepted Answer

Shareholder wealth is the value received by shareholders in the form of dividends and capital appreciation of their stock holdings. The most direct measure of shareholder wealth is the common stock price times the number of shares outstanding. Therefore, option C is the correct choice. Options A and B are not relevant in measuring shareholder wealth because they represent either the total value of a company's assets (including those financed by debt) or the value of assets after deducting liabilities, which does not directly reflect shareholders' value. Option D is incorrect because there is a clear measure of shareholder wealth, which is the common stock price times the number of shares outstanding.

Shareholder Wealth Would Be