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

question 20

Multiple Choice

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

• A) Maximize its expected total corporate income.
• B) Maximize its expected EPS.
• C) Minimize the chances of losses.
• D) Maximize the stock price per share over the long run,which is the stock's intrinsic value.
• E) Maximize the stock price on a specific target date.

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Definitions:

Transit

The system or means of moving people or goods from one place to another.

Equilibrium Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied by producers in a market.

Fine Imposed

A penalty, usually in the form of a monetary payment, levied on an individual or entity for violating laws or regulations.

Long-Run Equilibrium

A state in a market where all firms are making normal profits, and there is no incentive for firms to enter or exit the industry.