If Managers Do Not Pursue the Goal of Maximising Shareholder

question 40

Multiple Choice

If managers do not pursue the goal of maximising shareholder wealth [blank].

• A)they concentrate on more important matters like growing market share
• B)they can focus more on social responsibilities
• C)they are likely to lose their jobs
• D)they can focus more on long-term profitability

---

Definitions:

Internal Growth Rate

The maximum rate at which a company can expand using only internal financing sources, without external financing.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends, indicating how much profit is reinvested.

Net Income

The amount of money remaining after all operating expenses, taxes, and interest have been deducted from total revenue.