Maximizing Enterprise Value and Maximizing Shareholder Value Are Closely Linked

question 55

Multiple Choice

Maximizing enterprise value and maximizing shareholder value are closely linked because:

• A)Enterprise value and shareholder value are the same thing
• B)Shareholder value is calculated by adding debt and other non-equity financial claims to the DCF value of the firm
• C)Shareholder value is calculated by subtracting debt and other non-equity financial claims from the enterprise value of the firm
• D)A business enterprise is owned by its shareholders.

---

Definitions:

Social Comparison

The process by which individuals evaluate their own abilities, achievements, and situation in relation to others.

Mere Contact

relates to the phenomenon where increased exposure to something or someone leads to a more positive evaluation of that object or person.

Prejudices

Preconceived opinions or judgments about people or situations that are not based on reason or actual experience.

Within Group Friendships

Relationships characterized by personal bonds and affinities that develop among members within the same group or team.