The Primary Operating Goal of a Publicly-Owned Firm Interested in Serving

question 20

Multiple Choice

The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to

• A) Maximize its expected total corporate income.
• B) Maximize its expected EPS.
• C) Minimize the chances of losses.
• D) Maximize the stock price per share over the long run,which is the stock's intrinsic value.
• E) Maximize the stock price on a specific target date.

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Definitions:

Corporations

Business entities that are legally separate from their owners, providing limited liability protection to its shareholders.

United States

Refers to a country located primarily in North America, comprising 50 states and known for being a major political and economic power globally.

Stated Value

A value that is assigned to a share of stock by the issuing company, which may bear no relation to its market value.

Par Value

Par value is the nominal or face value of a bond, share of stock, or coupon as stated by the issuer.