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:

Neo-Freudians

A group of psychologists who, while inspired by Freud's theories, extended his ideas to include social and cultural factors in personality development and dynamics.

Psychoanalysis

A method of psychological therapy and analysis developed by Sigmund Freud, which emphasizes unconscious mental processes and childhood experiences as determinants of psychological health.

Freudian Theory

A set of psychoanalytic theories developed by Sigmund Freud that emphasizes unconscious motivations and conflicts as determinants of human behavior.

Modern Psychoanalytic Theory

An evolution of Freudian psychoanalysis that incorporates newer research and concepts, focusing on how early relationships shape the unconscious mind and influence behavior.