Question

1. The measure of shareholder wealth

According to finance theory, firms should attempt to maximize the _________ (short-term or long-term) the long-term price of the firm’s common stock. The benefit to this objective is that it provides the best financial outcome for the firm’s _______ (owners or creditors) . **side note: I think this question has a typo with long-term being added in twice

To expand his portfolio, Jorge recently purchased 400 shares of common stock in the American Power Corporation, a utility firm in Georgia. The current market price of APC’s common stock is $27.50 per share. Jorge’s total wealth from his investment in American Power Corporation is _______ ($19,250 or $7,150 or $12,650 or $11,000.00).

Two years have passed since Jorge purchased his 400 common shares in the American Power Corporation. The market price of the company’s shares is now $17.88 per share. As a result, Jorge’s wealth from his investment in APC has ______ (not changed, increased, or decreased) by _______ ($2,963.60 or $6,734 or $2,501.20 or -$3,848.00) assuming that everything else remains constant.

Answer 1

According to finance theory, firms should attempt to maximize the ___LONG-TERM______ (short-term or long-term) the long-term price of the firm’s common stock The benefit to this objective is that it provides the best financial outcome for the firm’s ____OWNER
To expand his portfolio, Jorge recently purchased 400 shares of common stock in the American Power Corporation, a utility firm in Georgia. The current market price of APC’s common stock is $27.50 per share. Jorge’s total wealth from his investment in American Power Corporation is __$11000.00_____
Two years have passed since Jorge purchased his 400 common shares in the American Power Corporation. The market price of the company’s shares is now $17.88 per share. As a result, Jorge’s wealth from his investment in APC has …DECREASED by $3,848.00 assuming that everything else remains constant.