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:

Individual Values

Unique numerical or qualitative characteristics that distinguish one entity from another.

Intersection

The point or set of points where two or more paths, lines, or surfaces cross each other, often used in mathematics and geography.

Row

A horizontal line of cells in a spreadsheet or table.

Column

A vertical division in a table or spreadsheet that categorizes information under a specific heading for organization and reference.