Which of the Following Statements Best Describes Corporate Goals

question 59

Multiple Choice

Which of the following statements best describes corporate goals?

• A)The proper goal of the financial manager should be to attempt to maximize the firm's expected cash flows, because this will add the most to the wealth of the individual shareholders.
• B)The financial manager should seek that combination of assets, liabilities, and capital that will generate the largest expected projected after-tax income over the relevant time horizon, generally the coming year.
• C)The riskiness inherent in a firm's earnings per share (EPS) depends on the characteristics of the projects the firm selects, and thus on the firm's assets. However, EPS is not affected by the manner in which those assets are financed.
• D)Potential agency problems can arise between shareholders and managers, because managers hired as agents to act on behalf of the owners may instead make decisions favourable to themselves rather than the shareholders.

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Definitions:

Operating System

The base software that manages computer hardware and software resources, and provides common services for computer programs.

MS-DOS

Short for Microsoft Disk Operating System, it's a non-graphical command line operating system used in the early days of personal computing.

Interface

A shared boundary across which two separate components of a computer system exchange information.

Path Separator

The backslash mark (\) used by Microsoft Windows and DOS in file names. Mac files use a colon (:), and UNIX and Linux use the forward slash (/) as the path separator.