A major advantage of using the maximization of shareholder wealth as the primary goal of the firm is that this goal considers _____.
A) the timing and the risk of the expected benefits to be received
B) the investor's consumption utility
C) the value of closely held partnerships
D) All of these are correct

Question

Quizplus · Accepted Answer

Maximization of shareholder wealth takes into consideration the timing and risk of expected benefits to be received by the shareholders in the form of dividends and capital gains. It focuses on creating long-term value for shareholders, rather than short-term gains. While investor consumption utility and closely held partnerships are important factors to consider, they are not the primary focus of the firm's goal of maximizing shareholder wealth.

A Major Advantage of Using the Maximization of Shareholder Wealth