Over the years, Janjigian Corporation's stockholders have provided $15,250 of capital, part when they purchased new issues of stock and part when they allowed management to retain some of the firm's earnings. The firm now has 1,000 shares of common stock outstanding, and it sells at a price of $42.00 per share. How much value has Janjigian's management added to stockholder wealth over the years, i. e., what is Janjigian's MVA

Question

Business

Milton Wood

11 June, 16:39

Over the years, Janjigian Corporation's stockholders have provided $15,250 of capital, part when they purchased new issues of stock and part when they allowed management to retain some of the firm's earnings. The firm now has 1,000 shares of common stock outstanding, and it sells at a price of $42.00 per share. How much value has Janjigian's management added to stockholder wealth over the years, i. e., what is Janjigian's MVA

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Answers (1)

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Adan Coffey · Answer 1

Janjigian's Market Value Added = $26,750

Explanation:

Given:

Capital of Janjigian Corporation's = $15,250

Number of common stock = 1,000

Sell price = $42 per share

Find:

Janjigian's Market Value Added.

Computation:

⇒ Market Value = Number of common stock * Sell price

⇒ Market Value = 1,000 * $42

⇒ Market Value = $42,000

⇒ Market Value Added = Market Value - Capital of Janjigian Corporation's

⇒ Janjigian's Market Value Added = $42,000 - $15,250

⇒ Janjigian's Market Value Added = $26,750