Financial managers should strive to maximize the current value per share of the existing stock to:
A) guarantee the company will grow in size at the maximum possible rate.
B) increase employee salaries.
C) best represent the interests of the current shareholders.
D) increase the current dividends per share.
E) provide managers with shares of stock as part of their compensation.

Question

Quizplus · Accepted Answer

Maximizing the current value per share of existing stock best represents the interests of current shareholders. It indicates that the company is using its resources efficiently and generating profits that can be distributed to shareholders as dividends or reinvested in the business to generate even more value in the future. It is a key performance metric for financial managers and is closely watched by investors as well. A, B, D, and E may be desirable outcomes but are not the sole objective of financial managers.

Financial Managers Should Strive to Maximize the Current Value Per