How much value has janjigian management added to stockholder

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Reference no: EM132941592

Problem 1: Over the years, Janjigian Corporation's stockholders have provided $17,750 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 $40.00 per share. How much value has Janjigian's management added to stockholder wealth over the years, i.e., what is Janjigian's market value added (MVA)?

Hint: MVA=Market value of Stock - Equity capital supplied by shareholders
MV of stock = (Shares outstanding) x (Stock price)
Equity capital supplied = Total common equity

A. $22,250

B. $24,250

C. $24,750

D. $20,250

E. $26,750

Reference no: EM132941592

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