The Primary Operating Goal of a Publicly-Owned Firm Trying to Best

question 8

Multiple Choice

The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be to

• A) Maximize managers' own interests,which are by definition consistent with maximizing shareholders' wealth.
• B) Maximize the firm's expected EPS,which must also maximize the firm's price per share.
• C) Minimize the firm's risks because most stockholders dislike risk.In turn,this will maximize the firm's stock price.
• D) Use a well-structured managerial compensation package to reduce conflicts that may exist between stockholders and managers.
• E) Since it is impossible to measure a stock's intrinsic value,the text states that it is better for managers to attempt to maximize the current stock price than its intrinsic value.

---

Definitions:

Loud Long Low Tones

Acoustic stimuli characterized by their high amplitude, extended duration, and low pitch, often used in hearing tests or music therapy.

Air in Lungs

The presence of air within the pulmonary alveoli, essential for the process of gas exchange during respiration.

Bimanual Palpation

A physical examination technique using both hands to feel organs or masses on opposite sides of the body or structure.

Palpating Kidneys

The act of examining the kidneys by touch, typically to detect abnormalities or assess their condition.