[bryanpeele]

What is shareholder wealth

[ArcSine]

That phrase by itself doesn't have much meaning, until you wrap some particular context around it. But probably 99% of the time I hear it, it's in the context of the age-old argument about what should a firm's "objective" be--e.g. shareholder wealth max'n, profit max'n, ROI max'n, social benefits, employee bennies, etc.

In that context, SW refers to the NPV of the equity held by residual equity owners (i.e. the common shareholders).

[morgaine300]

I'm a shareholder and I have no wealth. :p

[ArcSine]

Yeah, I got pretty excited when I first heard about the "Cash for Clunkers" program--then I learned that it only covered cars, and not bank stocks :D

[morgaine300]

Lol