Maximization of shareholder wealth is not an accounting concept. A corporation's value should be based on _____ value.
A) liquidation
B) book
C) market
D) stock

Question

Quizplus · Accepted Answer

Market value represents the true value of a corporation and takes into account the current market conditions and investor expectations. Maximizing shareholder wealth involves increasing market value by making strategic decisions that increase profitability and growth potential. Liquidation value is the value that would be received if all assets are sold and debt is paid off, which is not a practical basis to measure the long-term value of a corporation. Book value represents the value of a corporation's assets minus its liabilities as reported on the balance sheet, but it does not reflect the true market value of the company. Stock value is a result of market perception and changes in response to various factors, such as earnings reports, industry trends, and economic conditions.

Maximization of Shareholder Wealth Is Not an Accounting Concept