Maximization of Shareholder Wealth as a Goal Is Superior to Profit

question 22

Multiple Choice

Maximization of shareholder wealth as a goal is superior to profit maximization because:

• A)it considers the time value of the money.
• B)following the shareholder wealth maximization goal will ensure high stock prices.
• C)it considers uncertainty.
• D)A and C.

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Definitions:

Antilapse Clause

In an insurance policy, a clause which states that the insured has a grace period in which to make an overdue payment.

Appraisal

An expert estimation of the value of property, typically real estate, art, or jewelry, often for the purpose of taxation, sale, or insurance.

Arbitration Clauses

Arbitration clauses are provisions in a contract that require the parties to resolve disputes through arbitration rather than through litigation in court.

Federal Law

Laws created and enforced by the federal government of a country, as opposed to state, local, or international laws.