A Manager Should Attempt to Maximize the Value of the Firm

question 49

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

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