Corporate Managers Can Maximize Shareholder Wealth by Choosing Positive NPV

question 27

Multiple Choice

Corporate managers can maximize shareholder wealth by choosing positive NPV projects because:

• A) all investors have the same preferences.
• B) the unhappy shareholders can sell off shares.
• C) the separation theorem in financial markets states that all investors will be satisfied with the same investment decision regardless of personal preferences.
• D) managers are wiser than shareholders regarding investments.

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Definitions:

Prejudices

Preconceived negative judgments or feelings towards individuals based on their membership in a certain group without factual justification.

Male Instructors

Educators or trainers who identify as male and are engaged in the process of teaching or instruction.

Female Instructors

Refers to educators or teachers who identify as female and are involved in the process of teaching or instruction.

Competent

Having the necessary ability, knowledge, or skill to do something successfully or efficiently.