Why Should Financial Managers Strive to Maximize the Current Value

question 6

Multiple Choice

Why should financial managers strive to maximize the current value per share of the existing stock?

• A)doing so guarantees the company will grow in size at the maximum possible rate
• B)doing so increases employee salaries
• C)because they have been hired to represent the interests of the current shareholders
• D)because this will increase the current dividends per share
• E)because managers often receive shares of stock as part of their compensation

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Definitions:

Western

Often refers to something related to the Western world, typically associated with cultures and countries in Western Europe and North America, or to the genre in film and literature characterized by themes of the American frontier.

Inferential Statistic

Statistical methods that allow researchers to make predictions or inferences about a population based on a sample of data.

Spatial Task

A task that involves understanding, perceiving, and manipulating objects and their relationships in space.

Placebo Effect

A beneficial effect produced by a placebo drug or treatment, which cannot be attributed to the properties of the placebo itself, and must therefore be due to the patient's belief in that treatment.