SHARE PRICE...is there a link?

Question

i know this seems like a no brainer but ive heard conflicting reports.

is share price directly related to shareholders wealth?

i figure that share priceis tied to firm value which is pretty much shareholders wealth.

therfore if the share price goes up so does the shareholders wealth.

is this true?

many thanks

Answer 1

The shareholder's wealth goes up when the price goes up and goes down when the stock price goes down.

It is a snapshot of a shareholders wealth as of a given moment, but not a constant.

Answer 2

that is certainly correct