The primary goal of the business firm is to maximize the wealth of the firm's owners.

"The primary goal of the business firm is to maximize the wealth of the firm's owners." For a corporation, this statement means that managers should focus on maximizing the wealth of its shareholders or its:

net income
minimize the risk
stock price
sales revenue

Solutions

Expert Solution

The answer is

Stock price

Stockholders’ Wealth = Stock Price*Number of shares

Hence, stock price is to be maximized to maximize the wealth of the shareholders

Net Income and Sales revenue will not lead to maximization of wealth

jeff jeffy answered 1 year ago

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