Over the years, Masterson Corporation's stockholders have provided $35,000,000 of capital when they purchased new issues of stock and allowed management to retain some of the firm's earnings. The firm now has 1,900,000 shares of common stock outstanding, and the shares sell at a price of $30 per share. How much value has Masterson's management added to stockholder wealth over the years, that is, what is Masterson's MVA

$22,000,000

Explanation:

The computation of Masterson's MVA is shown below:-

MVA = Current market value - Initial capital provided by stockholders

= (1,900,000 × $30) - $35,000,000

= $57,000,000 - $35,000,000)

= $22,000,000

Therefore for computing the Masterson's MVA we simply applied the above formula.

Hence, the Masterson MVA is $22,000,000

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

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explanation: