The Primary Goal of a Publicly-Owned Firm Interested in Serving

question 21

Multiple Choice

The primary goal of a publicly-owned firm interested in serving its stockholders should be to

• A) Minimize the debt used by a firm.
• B) Maximize expected EPS.
• C) Minimize the chances of losses.
• D) Maximize the stock price per share.
• E) Maximize expected net income.

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Definitions:

Production Possibilities Frontier

A depiction that captures every maximum production possibility for two specific commodities, predicated on a range of inputs that includes resources and additional variables.

Opportunity Costs

The expense incurred from not selecting the next most favorable choice when a decision is taken or preferring one alternative over another.

Efficient

The characteristic of a resource allocation that maximizes the total surplus received by all members of society.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, technology, etc.), assuming efficient use of resources.