The Best Way to Maximize the Intrinsic Value of a Company

question 35

True/False

The best way to maximize the intrinsic value of a company and thus shareholders' wealth is to maximize its earnings per share.

Recognize the ethical responsibilities of businesses towards stakeholders other than shareholders.

Understand the relationship between legal acts and morality.

Define ethics and distinguish it from legal standards.

Appreciate the concepts of rule utilitarianism versus act utilitarianism.

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Definitions:

Labor Supply

The total hours that workers in an economy are willing and able to work at a given overall wage rate.

Wages

Wages are payments made to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Factors of Production

The inputs used in the production of goods or services in the process of creating economic value; these typically include land, labor, capital, and entrepreneurship.

Monopsony Firm

A market situation where there is only one buyer or a dominant buyer for a product or service, giving that buyer substantial control over market prices and terms.