Financial Managers Should Strive to Maximize the Current Value Per

question 19

Multiple Choice

Financial managers should strive to maximize the current value per share of the existing stock because:

• A) doing so guarantees the company will grow in size at the maximum possible rate.
• B) doing so increases the salaries of all the employees.
• C) the current stockholders are the owners of the corporation.
• D) doing so means the firm is growing in size faster than its competitors.
• E) the managers often receive shares of stock as part of their compensation.

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Definitions:

Liability

The state of being legally responsible for something, typically involving financial or legal obligations that result from one's actions or agreements.

Contractual Authority

The power granted to an individual or entity to enter into legally binding contracts on behalf of another person or organization.

Liable

Being legally responsible for something, typically involving a financial or legal obligation.

Contract

A lawful agreement among two or more parties that has legal authority and enforceability.