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If a Firm's Managers Want to Maximize Stock Price It

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If a firm's managers want to maximize stock price it is in their best interests to operate efficient, low-cost plants, develop new and safe products that consumers want, and maintain good relationships with customers, suppliers, creditors, and the communities in which they operate.


Definitions:

Interest Rate

A charge applied by lenders for loaning out assets, calculated as a fraction of the principal amount.

Exchange Rate

The price at which one country's currency can be exchanged for another country's currency.

Domestic Investment

Domestic investment pertains to the total amount of money spent on capital goods, services, and structures within a country.

Loanable Funds Market

A market where borrowers and lenders interact, with the interest rate determined by the supply of and demand for loanable funds.

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