The Reason Why Maximizing Share Value and Maximizing EPS Do

question 185

Multiple Choice

The reason why maximizing share value and maximizing EPS do not give the same optimal capital structure is because ________.

• A) EPS maximization does not consider risk
• B) share value maximization does not consider risk
• C) EPS maximization considers cash flows
• D) EPS maximization does consider risk

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Definitions:

Reward Center

Areas in the brain, such as the nucleus accumbens, which are involved in the reinforcement of behaviors by producing feelings of pleasure.

Sensory Control

The regulation or management of sensory input to alter perception, behavior, or physiological responses.

Reward Circuits

Neural pathways in the brain that regulate the motivation and pleasure response, critical in learning and addiction.

Pure Enjoyment

The experience of pleasure or satisfaction obtained without any ulterior motive or external incentive.