The Financial Manager Should

question 60

Multiple Choice

The financial manager should:

• A)try to maximize the after-tax payout to the shareholders,for a given payout amount.
• B)try to maximize the firm's earnings per share.
• C)pay the highest dividend possible.
• D)never pay a dividend.

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Definitions:

Fiduciary

A person who has a duty to act primarily for another person’s benefit.

Duty of Performance

An agent’s obligation to perform the duties specified in the agency agreement and to do so with reasonable skill and care.

Principal

The amount of money originally invested or loaned, on which basis interest and returns are calculated.

Agent

A party who has the authority to act on behalf of and bind another party.