Which of the following actions should a firm take to ensure it is attaining its primary...

Which of the following actions should a firm take to ensure it is attaining its primary its primary goal of maximizing value?

a. Maximize the dividends paid to common stockholders.

b. Maximize the price of the firm's stock.

c. Maximize the book value per share of the common stock.

d. Maximize its earning per hare (EPS).

Solutions

Expert Solution

The asnwer is

b. Maximize the price of the firm's stock.

Value = Price*Number of shares

Maximizing shareholders' value is the primary objective of every firm

Hence, price is to be maximized

All others are secondary goals

jeff jeffy answered 1 year ago

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