Wealth Maximization Is Consistent with Ethical Behavior Because

question 27

Multiple Choice

Wealth maximization is consistent with ethical behavior because

• A) Managers tend to focus on long-term results not immediate performance
• B) All unethical behavior by managers is known and ethical shareholders will not hold shares in their companies
• C) Any unethical behavior always results in legal proceedings against the company
• D) Low wages and poor working conditions do not produce quality, innovative products
• E) In the short term, ethical behavior is always more cost-effective than unethical behavior

---

Definitions:

Dividend Yield Ratio

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, often expressed as a percentage.

Market Price

The present cost at which a service or asset is available for purchase or sale.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue, indicating how effectively assets are utilized.

Generate Sales

The activity of creating or increasing revenue through the sale of goods or services.