Financial Managers Should Strive to Maximize the Current Value Per

question 19

Multiple Choice

Financial managers should strive to maximize the current value per share of the existing stock because:

• A) doing so guarantees the company will grow in size at the maximum possible rate.
• B) doing so increases the salaries of all the employees.
• C) the current stockholders are the owners of the corporation.
• D) doing so means the firm is growing in size faster than its competitors.
• E) the managers often receive shares of stock as part of their compensation.

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Definitions:

1934 Act

The Securities Exchange Act of 1934, which governs the trading of securities, such as stocks and bonds, in the U.S.

Proxy Solicitations

The process of gathering votes or consents from shareholders by a party seeking to influence decisions or actions within a company, often related to corporate governance issues.

Proxy Statement

A document that a publicly traded company is required to send to its shareholders, containing information necessary to make informed decisions at shareholder meetings.

Preliminary Proxy Statements

Initial documents distributed to shareholders that outline matters to be voted on during a corporation's upcoming meeting.