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

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 2 years ago

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

The primary financial goal of the business firm is to maximize the wealth of the firm's owners. Wealth, in turn, refers to value. If a group of people owns a business firm, the contribution that firm makes to that group's wealth is determined by the market value of that firm. Are you agree? yes or no ? why?

the primary goal of financial managers is to maximize the wealth of the owners.

the primary goal of financial managers is to maximize the wealth of the owners. Do u fully agree or disagree with this statement

In finance theory, the goal of the firm is said to be “maximize wealth” instead of “maximize profit.”

In finance theory, the goal of the firm is said to be “maximize wealth” instead of “maximize profit.” Define shareholder wealth. How would one measure shareholder wealth? Briefly discuss two limitations of “profit maximization” as a goal for the firm.

The goal of the firm is? Maximize Retained Earnings Minimize Risk Maximize Shareholders wealth Maximize Net...

The goal of the firm is? Maximize Retained Earnings Minimize Risk Maximize Shareholders wealth Maximize Net income

Gitman says that the goal of a firm is to maximize the wealth of its owners. What can financial managers do to achieve this end?

Remember that the primary goal of a firm is to maximizeshareholder wealth by increasing the...

Remember that the primary goal of a firm is to maximize shareholder wealth by increasing the firm’s intrinsic value. It is thus important to understand the impact of distributions—both in the form of dividends or stock repurchases—on the firm’s value. Consider the following situation: Kathy is a financial analyst in BTR Warehousing. As part of her analysis of the annual distribution policy and its impact on the firm’s value, she makes the following calculations and observations: • The company generated...

The primary goal of the financial manager of a firm is to: A) maximize operating income...

The primary goal of the financial manager of a firm is to: A) maximize operating income B) Generate growing sales C) Maximize the book value of the company D) maximize the market value of the shareholders' investment in the company E) Increase profit margins

The primary goal for managers is to _ of the firm's _

The primary goal for managers is to _______ of the firm's _______ a. minimize the long-run value; preferred stock b. minimize the long-run value; common stock c. maximize the short-run value; common stock d. maximize the long-run value; common stock

the primary goal of financial management of a firm is to maximize its stock price in...

the primary goal of financial management of a firm is to maximize its stock price in the short run. Improving ROE( return on equity) is usually translated into greater stock price. The question is how to improve ROE. Much research agrees that high ROE depends on good liquidity,__________ proper use of debt.

The primary goal of households is to maximize their utility.

The primary goal of households is to maximize their utility. True False

Question