The Authors Note That the Goal of Maximizing the Market

question 53

Multiple Choice

The authors note that the goal of maximizing the market value of the firm may be more appropriate than maximizing short-run profits because:

• A) the market value of the firm is based on long-run profits.
• B) managers will not focus on increasing short-run profits at the expense of long-run profits.
• C) this would more closely align the interests of owners and managers.
• D) all of the above

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Definitions:

Situational Leadership Model

A leadership theory that proposes leaders should adapt their style based on the maturity and competence of the individuals or groups they are leading.

Encouraging

Offering support, confidence, or hope to someone, often motivating them to continue or start an endeavor.

Situational Factors

External influences that affect an individual's behavioral response in a given situation.

Vroom-Jago Leadership Model

A decision-making framework for leaders that factors in the importance of the decision, the commitment of the team, and the leader's expertise.