A Manager Should Attempt to Maximize the Value of the Firm

question 56

Multiple Choice

A manager should attempt to maximize the value of the firm by:

• A) changing the capital structure if and only if the value of the firm decreases.
• B) changing the capital structure if and only if the value of the firm increases to the benefit of the stockholders.
• C) changing the capital structure if and only if the value of the firm increases only to the benefits the debtholders.
• D) changing the capital structure if and only if the value of the firm increases although it decreases the stockholders' value.
• E) changing the capital structure if and only if the value of the firm increases and stockholder wealth is constant.

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Definitions:

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